PURPOSE OF THIS DOCUMENT
CONFIDENTIALITY AGREEMENT

General Purpose. A confidentiality agreement is generally used in two settings: (a) as part of an employment - independent contractor agreement and (b) as a prelude to discussions between two parties exploring the possibility of transacting business.

• In the employment context, confidentiality agreements protect the employer against improper disclosure or use of the company sensitive information and materials that are not known to the general public. Examples of such information would be customer lists, pricing information, methods for obtaining new business, production processes, other trade secrets, and internal company financial information.
• In the case of confidentiality agreements signed prior to exploratory business discussions, the purpose of the confidentiality agreement is to allow each side to divulge confidential information to the other for purposes of discussing the sale of assets, joint ventures, or other business arrangements. In the agreement, each side makes promises to the other regarding safeguarding of confidential information and agrees to return the information / materials upon request of the disclosing party.
• The meat of the confidential clause used in our forms is, generally, as follows (with variations depending upon the type of contract at issue):

  Required Confidentiality. For so long as Employee shall remain employed by Employer and for a period of X years with Employer for any reason, Employee shall not disclose or communicate any "Confidential Information" of Employer to any person or entity other than Employer nor use said "Confidential Information" for any purpose or reason other than the benefit of Employer. For purposes of the preceding sentence, "Confidential Information" means (but is not limited to) any information regarding Employer's business methods, business policies, procedures, techniques, research or development projects or results, sales information of any kind, financial information of any kind, trade secrets or other knowledge possessed by Employer which is not generally known by individuals outside of the Employer (including Employer's employees, consultants, and advisors). Also, "Confidential Information" shall additionally include, but not be limited to, the follow information of Employer: ... .

• Injunctive relief. Our contract forms, as should any quality confidentiality agreement, provides that the parties agree that there has been "irreparable harm" to the other side should its confidential information be disclosed to unauthorized third parties and, further, that injunctive relief would be available in the case of a breach. One of the restrictions upon obtaining a court injunction (i.e., a court order telling the offending party to refrain from breaking the confidentiality agreement and to return the confidential information) is that there be "irreparable harm". This can be a hard burden to fulfill as money damages are usually deemed an adequate remedy in most cases. By having a written confidentiality agreement that, in advance, has the parties agreed that irreparable harm would exist in case of breach, one has put a substantial tool in the hands of the injured party in case of a breach.
• The following are links to others MedLawPlus.com® forms that contain confidentiality agreements:
  1. Employment Agreement
  2. Independent Contractor Agreement
  3. Service Level Agreement (specialized form of independent contractor agreement)
  4. Confidentiality Agreement for Employees and Independent Contractors (without the full employment agreement)
  5. Letter of Intent (used once the parties have reached agreement relative to an asset or business sale)
  
  
  Links to additional information relative to confidentiality agreements:
  • David V. Radack, Understanding Confidentiality Agreements; and
    
  • Non-disclosure Agreements, About.com.
  
  
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