Employee Confidentiality Agreement

The consequences of not having an Employee Confidentiality Agreement may vary significantly. In most cases, the type of industry and the business model of the company may affect what will happen. Having trust in your employees might be sufficient when running a smaller business. But not having an Employee Confidentiality Agreement is likely to open your business to numerous vulnerabilities.

The reason why it is so important to specify the location of the signed agreement is that the relevant business laws may vary from state to state. It is preferable to be familiar with your state’s law regarding confidentiality agreements in general and how they are enforced before signing the agreement.

The specificities of what happens if an employee breaks the agreement are usually included in the agreement. An employer can be as detailed as desired as to what is to be expected as a consequence if the terms are broken. It could start with monetary penalties and termination and up, including litigation and a claim for the suffered damages.

To be on the safe side, some employers choose to hire a law firm to help them draft an Employee Confidentiality Agreement. Some of the wording for these contracts may be confusing to the uninitiated. Also, since you have to adjust the document according to the state law, you might need an expert's help to guide you through it.

If you don't want to spend resources on attorneys, you can create the Employee Confidentiality Agreement on your own. It is essential to avoid common mistakes like making the agreement too broad and potentially unenforceable. Make sure that all the legal names of the parties are correct before signing. Also, it is crucial to make sure the person signing the document has the authority as the company's representative. Otherwise, it might end up legally unenforceable.