Less may be more with confidentiality agreements

Confidentiality agreements are important for a business, no matter its size or the line of business. Whether you have a significant intellectual property portfolio, proprietary software, client lists or simply salary information of some employees, you should have it protected by a confidentiality agreement. More important, those agreements should be tailored to each employee, to ensure that the agreement covers relevant information and is enforceable in Minnesota or other jurisdictions where you have employees and do business.

The key to any confidentiality agreement is that it be enforceable. A broad comprehensive agreement may make you feel as if your business is protected from any possible eventuality, but that comprehensiveness may be seen as overreaching by a court when it refuses to enforce the agreement.

You might believe that a simple agreement that you found on the internet, and that you require all of your employees, may be sufficient. However, if it covers material that is not relevant for some employees or is so broad as to include information that is not really a trade secret or confidential, that overreach could cripple its enforceability.

If you are attempting to enforce an agreement against a former employee, you should keep in mind that you will need to prove that the breach of the agreement caused actual damage. You will need to prove that it was the leak of specific information that caused damage, and that can be difficult in many situations.

Speculation and innuendo are unlikely to be enough in court. Some information may be potentially damaging, but if you cannot produce compelling proof that the leak is linked to damage, it may not be cost effective to litigate. You may also need to consider the financial resources of anyone you sue. Most individuals are unlikely to be able to pay a significant damage award.

As always, the time to have these discussions with your attorney is before someone has walked out the door with a flash drive of your confidential records.