Confidentiality agreements: the durable protection
Less contested than a non-compete, effective for longer, and the one most often drafted carelessly.
Esshaki Legal Media TeamCurrent as of December 2022
Confidentiality obligations protect the information itself rather than
restricting where someone may work, which is why they face fewer enforceability
problems than restrictive covenants and why they are usually the more valuable
protection.
Define the information carefully. Too narrow and it misses what matters; too
broad — “all information disclosed” — and it becomes unenforceable in practice
and impossible to police. The standard exclusions should be present: information
already public, already known to the recipient, independently developed, or
received from a third party without restriction.
Duration. Perpetual obligations are common and are viewed skeptically in some
jurisdictions for ordinary confidential information. A defined term for general
confidential information with an indefinite term for trade secrets is a
defensible structure.
Permitted disclosure. To employees and advisers on a need-to-know basis, and
where compelled by law or court order — with notice to the disclosing party where
lawful, so they may seek protection.
Remedies. State that damages are inadequate and injunctive relief is
appropriate. It does not bind a court, but it is routinely cited on an
application.
Return or destruction on termination, with a carve-out for archival backup
copies, which is realistic — most systems cannot selectively purge backups, and a
clause requiring the impossible is not complied with.