Confidentiality agreements, often referred to as non-disclosure agreements (NDAs), are contracts designed to protect confidential, proprietary, or sensitive information from unauthorized disclosure or use.

Businesses may need to share sensitive information about their methods, strategies, procedures, products, customers, finances, or other aspects of their operations with employees, contractors, business partners, investors, or other parties. A confidentiality agreement can establish clear expectations regarding how that information may be used and when it must remain confidential.

Confidentiality agreements are used in many different industries and business relationships. They may be entered into between a business and its employees, between a business and independent contractors or consultants, or between two or more businesses working together.

Depending on the circumstances, a confidentiality agreement may remain in effect after the parties’ business relationship ends. An agreement may also establish remedies or other consequences for an unauthorized disclosure or use of confidential information.

What Should a Confidentiality Agreement Include?

The terms of a confidentiality agreement depend on the circumstances and the interests of the parties involved. A well-drafted agreement may address:

• The names and identities of the parties
• The date the agreement becomes effective
• The types of information considered confidential
• How confidential information may be used
• Who may access or receive the confidential information
• The duration of the confidentiality obligations
• Circumstances in which disclosure is permitted
• Exceptions to the confidentiality obligations
• Requirements for returning or destroying confidential information
• Remedies or other consequences for a breach
• Other terms necessary to protect the parties’ rights and interests

A confidentiality agreement should clearly define the information it is intended to protect and the circumstances under which the confidentiality obligations apply. The agreement should also be consistent with applicable federal and Virginia law.

Trade Secrets and Confidential Information

Confidential information and trade secrets are not necessarily the same thing. Under Virginia’s Uniform Trade Secrets Act, a trade secret generally must derive independent economic value from not being generally known or readily ascertainable through proper means and must be subject to reasonable efforts to maintain its secrecy.

A confidentiality agreement can be one tool a business uses to help protect confidential information and maintain the secrecy of information that may qualify as a trade secret. Businesses may also use other measures, such as limiting access to sensitive information and implementing appropriate security procedures.

Federal law also provides remedies for the misappropriation of qualifying trade secrets, including certain injunctive and monetary remedies.

Important Considerations for Employees and Contractors

Confidentiality agreements involving employees and independent contractors should be carefully drafted to account for applicable federal and state laws.

For example, federal law provides certain protections for individuals who confidentially disclose trade secrets to a government official or attorney for the purpose of reporting or investigating a suspected violation of law. Federal law also requires employers to provide notice of these protections in certain agreements governing the use of trade secrets or other confidential information.

Virginia law also prohibits employers from requiring employees or prospective employees to agree to certain nondisclosure or confidentiality provisions that conceal details relating to claims of sexual assault or sexual harassment as a condition of employment. Such provisions are void and unenforceable.

These requirements are among the reasons why confidentiality agreements should be reviewed carefully before they are signed.

Review a Confidentiality Agreement Before Signing

Like any contract, a confidentiality agreement should be carefully reviewed before it is signed. The parties should understand what information is covered, what restrictions apply, how long the obligations last, and what may happen if the agreement is breached.

A confidentiality agreement may contain significant obligations that continue after an employment or business relationship ends. Understanding those obligations before signing can help a party protect his or her rights and interests.

How Raheen Law Group Can Help

Raheen Law Group can assist clients with reviewing and understanding confidentiality agreements and NDAs before they are signed. We can help identify provisions that may affect your rights, responsibilities, and interests and explain the obligations created by the agreement.

We can also assist businesses with drafting and negotiating confidentiality agreements tailored to their specific needs and business relationships.

If you need guidance regarding the creation, review, negotiation, or enforcement of a confidentiality agreement or NDA, Raheen Law Group can help you understand your legal options.