Aldrich Law Firm, Ltd.
Aldrich Law Firm, Ltd.

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The basics of a confidentiality agreement

Employers in Nevada who do not want employees to share certain information with others should consider making them sign a confidentiality agreement. It will be worded differently for each situation, but this agreement basically lays out conditions that employees must comply with as a part of their employment.

According to Forbes, there are a number of reasons why a confidentiality agreement, also known as a non-disclosure agreement, may be used. These include:

  • Allowing confidential information to be shared with employees
  • Sharing an invention idea with a prospective investor or partner
  • Using services from an individual or company who may come across sensitive information as a result of these services
  • Informing a potential buyer of certain marketing and financial data of the business
  • Sharing a new technology with a potential licensee or buyer

Depending on the business, a confidentiality agreement may be a simple standard form, or it may be more involved in order to protect sensitive information. According to the Chronicle, there are four things that should be considered before drafting an agreement. The first is the purpose of the agreement, such as protecting intellectual property or trade secrets. Each state has its own laws in regard to a non-disclosure agreement, so an attorney should ensure the correct language and statutes are being used for the state in which the business is operating.  

The language in the agreement typically points out that the employee will be exposed to certain confidential information, what constitutes improper disclosure and the penalties for doing so. An agreement typically also includes an exclusion clause. This offers some protection for the employee in unusual situations.

John P. Aldrich
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