Breach of Contract – The Confidentiality or Non-Disclosure Clause

When Justin Bieber decided to throw a Gatsby-themed party recently, he made sure to have his guests sign a confidentiality agreement before they could attend. Partygoers had to keep mum about the bash and anything that happened there – or pony up a $3 million penalty for breach of contract.

Clearly the intent is to keep the party, Justin and his guests out of the media spotlight that follows him around. Now, you and your parties may not find yourselves in the tabloids on a regular basis, but there are many other instances where you may come across a confidentiality clause.

Keep it Confidential

Confidentiality clauses – or non-disclosure agreements (NDAs) – are a routine part of many employment contracts and business deals and they are made for various reasons. As with Justin’s party, the NDA may itself be a separate agreement or it may form part of a larger contract. They may be bilateral (binding to both parties) or unilateral (binding to only one of the parties). A bilateral non-disclosure agreement is more common in the case of a business deal or merger.

  • Business deals may require confidentiality
    • To keep proprietary products and processes pending a patent
    • To keep the competition from using the information to their advantage
  • Employers may require NDAs
    • So that they can deal with employees and contractors separately – i.e. your terms may be different than your co-workers
    • To protect proprietary products and processes

Common elements of a non-disclosure clause or agreement typically include:

  • Defining the parties to the agreement
  • Defining what specifically is to be kept confidential
  • The period of the agreement
  • Any exclusions

Many companies tend to take a sledgehammer approach to NDAs and simply exclude everything, all the time, although there are always exceptions. For example, if there is information that you could have or did obtain through other means – i.e. not by reason of your employment or the business dealings in question – then that information isn’t covered by the NDA.

In some cases, confidentiality may be an implied part of your employment agreement. You are required irrespective of any signed agreement to keep your employer’s crucial business information confidential as part of the normal duties of your job. Likewise, your employer has an obligation to keep your personnel information confidential whether there’s a specific agreement to that effect or not.

Let Us Help

The best time to deal with potential breach of contract issues is before the contract is signed. If you’re contemplating an employment or business contract, we can help you determine

  • Whether a confidentiality  or any other specific clause is actually required
  • If required, what parameters need to be kept confidential – and which should remain open
  • What it means for you now – and down the road

Get the Legal Representation You Need

Employment contracts of any kind can get complicated and you may not foresee the consequences of specific clauses.  Know your rights. Contact the breach of contract lawyers at Petrillo Law today by calling (905) 949-9433.  We look forward to hearing from you.

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