Virginia Confidentiality Agreement Attorneys
In the course of an employment relationship, an employee may be asked to sign many types of restrictive covenants, clauses or agreements. One type, a confidentiality agreement, which may also be known as a non-disclosure agreement, is simply a contract between parties who agree that certain proprietary information will be maintained in secrecy.
Confidentiality agreements define the parameters of a confidential relationship between the party who owns the secretive information and the party to whom the secrets are being disclosed. Such disclosures most often arise in the course of an employment relationship, but other business transactions, particularly for small businesses and startups that are seeking venture capital and private equity financing, may necessitate the use of a confidentiality or nondisclosure agreement. Parties to a confidentiality agreement are legally bound to take efforts to keep the information a secret.
Confidential agreements, or nondisclosure agreements, can be used to protect any type of information that is not generally known. A nondisclosure agreement is most commonly used to protect trade secrets, that is, any information that is not generally known and gives the business a competitive advantage in the marketplace. For example, a nondisclosure agreement may prohibit the disclosure of a secret inventive design, an idea for a new website, programming code, financial information, or other details relevant to the innovative process.
Generally speaking, there are five important elements to a confidential agreement:
- definition of confidential information;
- exclusions from confidential information;
- obligations of receiving party;
- time periods; and
- miscellaneous provisions.
Nondisclosure agreements can precisely define what is to be kept confidential. As one could imagine, the definition of “confidential” could be subject to interpretation. A thorough nondisclosure agreement will specifically and clearly define the term “confidential” and include the type of information that may fall under its umbrella. The prohibited use of the “confidential” information will also be clearly outlined in the nondisclosure agreement and will delineate how the parties are to handle such confidential material.
Generally, under a confidentiality agreement, the receiving party is obliged to hold and maintain the information in confidence and limit its use. The receiving party cannot breach the confidential relationship by improper disclosure, induce others to breach it, or induce others to obtain the confidential information through improper means.
The confidentiality agreement will designate the time period that the receiving party is required to maintain the confidence. This is a negotiated term that will depend on the relative bargaining power of the parties.
In addition to simply preventing the disclosure of confidential information, nondisclosure agreements also help prevent the forfeiture of valuable intellectual property rights. Under certain intellectual property laws, the public disclosure of information can be deemed as forfeiture of rights to that information. A properly drafted confidentiality agreement can, however, specify the parameters of disclosure and protect the valuable intellectual property rights.
If the information is revealed to another party, or if the receiving party breaches the confidential relationship in other ways, the injured party has a claim for breach of contract and can seek injunctive relief and monetary damages.
If you find yourself in need of a confidentiality or nondisclosure agreement, contact the employment law attorneys at MartinWren, P.C. We have vast experience in drafting thorough and sound contracts that will protect your interests and conform to existing Virginia law. If you are already party to an employment agreement and involved in a dispute concerning it, contact Robert E. Byrne, Jr. or John B. Simpson at 434-817-3100. We will review your confidential agreement or nondisclosure agreement, help you understand your rights and responsibilities, and will discuss the best strategies and tactics to deal with your agreement.