Factors that may render a confidentiality agreement unfeasible A confidentiality agreement is a legally binding contract that stipulates that two parties do not share or benefit from confidential information, often used by companies. Read 9 min Otherwise, you make disclosures at your own risk, because the receptive party could argue that it did not accept the confidentiality of the information disclosed prior to the signing of the NDA. In light of the above, efforts to prohibit covert transactions in the event of allegations of sexual harassment are welcome. Several states, including California, Pennsylvania and New York, are considering new laws to this effect, and Congress has introduced a bipartisan bill called the ME TOO Congress Act, which would similarly limit NOAs in harassment villages. The prohibition of secrecy in transaction agreements is an important step forward, as they certainly support the code of silence and the prisoner dilemma, which were a reality for employees of companies with cultures of harassment. A confidentiality agreement can be difficult to enforce in court. To obtain money in a breach claim, an employer must prove that the confidentiality agreement was not too broad, that the worker disclosed information that was protected by the agreement, and that the employer suffered financial harm as a result of the disclosure. Even if an employer meets these requirements, it does not change the fact that its secret information is no longer a secret and it can never recover the lost competitive advantage. An NOA must be reasonable to be enforceable.
Although the adequacy review is different between jurisdictions, courts generally take into account the public interest in secret work, the period during which the information must be kept secret, the burden of the receiving party and the public interest. Courts may invalidate or restrict the scope of an NDA that is not reasonable or excessively cumbersome. In addition, an ambiguity of the NDA may be invalid for indeterminacy if the terms are too clear to be imposed. For an NDA between employers and employees, the conditions of the NOA must be sufficiently limited to serve the legitimate affairs of the employer and must not contain things that are clearly not confidential information.