What is an Employee Confidentiality Agreement?
An Employee Confidentiality Agreement, or also referred to as a Non-Disclosure Agreement (NDA), is a legally binding contract in which an employee promises to keep sensitive and confidential information about the company they are working for to themselves only. He or she is not allowed to share this information with individuals outside of the said contract. The non-disclosure agreement will establish a confidential relationship between the employee and the company.
An Employee Confidentiality Agreement is used by different kinds of companies and entities to protect confidential information about their customers, partners, suppliers, production processes, marketing strategies, unique ideas, and other very important details about their business.
There are two types of non-disclosure agreements:
- Non-mutual non-disclosure agreement
- Mutual non-disclosure agreement
The non-mutual non-disclosure agreement is normally applied to newly-hired employees. If an employee is given access to highly sensitive and confidential information about the company, they will be required to sign the non-disclosure agreement that will then prevent them from sharing the said information with people outside of the contract. In some cases, the employee will be the only party required to sign the non-mutual non-disclosure agreement.
On the other hand, a mutual non-disclosure agreement is usually done between businesses who have negotiations with other businesses. Unlike the non-mutual non-disclosure agreement which only needs one party to sign it, a mutual non-disclosure agreement needs the signature of all parties involved in the negotiations.
Mutual non-disclosure agreements allow the parties involved to share sensitive and confidential information with each other without having to worry about any of it reaching individuals outside of the said contract.
An Employee Confidentiality Agreement must be clear and specific regardless of its type. For companies or entities entering into a mutual non-disclosure agreement, the said contract must specify what information can be regarded as trade secrets between the parties involved and which ones are strictly confidential. For employees signing a non-mutual non-disclosure agreement, the contract must specify what kind of information the employee is not allowed to disclose.
An Employee Confidentiality Agreement or a Non-Disclosure Agreement may differ depending on the parties involved but these contracts normally contains the following information:
- The full legal names of the parties involved in the agreement
- The specification of sensitive and confidential information regarding the employer or the company
- Clear statements regarding the appropriate uses of the sensitive and confidential information that will be revealed to the employee or the other party involved
- The time periods for the employee or the other party involved
- Important miscellaneous provisions such as laws that may apply to the Employee Confidentiality Agreement
An Employee Confidentiality Agreement or a Non-Disclosure Agreement is important for both an employee and his or her employer because it helps keeping vital information safe and private. There is also clarity regarding what can be shared with other individuals and what cannot be shared with other individuals.
Furthermore, an Employee Confidentiality Agreement or a Non-Disclosure Agreement can be made at a low cost. The said contract also specifies the consequences of violating any of the agreements made by all the parties involved.
This agreement will protect an entity’s private information from becoming public; and since it specifies the consequences of violations, it will also help prevent any leaks about the company’s confidential information.
How to fill out an Employee Confidentiality Agreement?
To fill out an Employee Confidentiality Agreement, you must provide the following information:
Enter the full legal name of the employee.
Enter the full legal name of the employer.
By signing this Employee Confidentiality Agreement, you (the employee) acknowledge that you have, or may in the future, come into the possession of certain sensitive and confidential information regarding the company. The said information may include but are not limited to the following:
- Trade secrets
- Customer lists
- Supplier lists and prices
- Pricing schedules
- Marketing plans
By signing this Employee Confidentiality Agreement, you (the employee) agree that at no time, during, or after your employment will use or disclose any sensitive and confidential information you have obtained from your employer just for your own personal benefit or the benefit of others.
By signing this Employee Confidentiality Agreement, you (the employee) will return to your employer after the termination of your employment and give back all copies and documents regarding your employer’s business. The said copies and documents may include but are not limited to the following:
- Customer lists
- Computer programs
- All other materials and all copies of such materials
By signing this Employee Confidentiality Agreement, your employer is entitled to an injunction to prevent any kind of violation against this non-disclosure agreement.
This Employee Confidentiality Agreement will also entitle your employer to other legal remedies which may include fees from attorneys and other related costs.
Any invalid, illegal, or unenforceable item under this Employee Confidentiality Agreement will not affect the other remaining items and will still remain and will be in full force and effect.
This Employee Confidentiality Agreement will be binding upon you (the employee) and your employer. It will also be binding upon your heirs, executors, personal representatives, administrators, and assignees.
Individuals who are not involved in this Employee Confidentiality Agreement will not have the right to cause action arising out of or resulting from this agreement. The only people allowed to do so are yourself (the employee), your employer, and your successors in interest.
This Employee Confidentiality Agreement will constitute the entire agreement between you (the employee) and your employer. This includes any attached exhibits and addenda.
There should be no representation or promises made by both parties outside of this Employee Confidentiality Agreement; only the items written in this contract will be deemed in effect.
No one is allowed to make any kind of modifications to this Employee Confidentiality Agreement except in writing signed by all the parties concerned.
Have the employee affix his or her signature.
Enter the current date.
Have the employer affix his or her signature.
Enter the current date.