Disclosure of Information Agreement
- Employers may have all employees or just high-level executives or key employees sign disclosure of information agreements. Sometimes, companies ask suppliers, investors or former or potential business partners to agree to these contracts too. The purpose behind the documents entail making sure that the company can maintain a competitive edge over rivals by keeping trade secrets out of the public domain. Often, workers go to work for a competitor or even start a competing business and may attempt to use the confidential information.
- A trade secret could come in the form of a new innovation you have yet to patent, a new method or technique, new computer codes, a client list or a business plan. Prototypes, devices, services or new products also fit the definition of trade secrets. Almost anything that gives an entity an advantage over other businesses may obtain classification as secret company information, and the law allows the owner to protect it. Once the information becomes public, it can no longer go under the heading of "trade secret" and receive the protection of the law.
- An effective disclosure agreement usually has the following characteristics: an explanation of the company's confidential information, any exception of the secret information, and duties and responsibilities of the party receiving the information. The contract may also contain the period the contract covers, remedies for breach of the agreement and other provisions.
- Do not underestimate the time frame clause of the disclosure contract. The period has to provide sufficient protection to the individual or company disclosing the secret information, but not so unreasonably long that it creates a burden to the party receiving the information. The Service Corps of Retired Executives (SCORE) states that five years usually suffices for U.S. contracts.
- Attorney Richard Stim states on the SCORE website that you should read and understand the scope of the contract before signing the document. Make sure that the agreement make up a confidential disclosure contract and not have the opposite affect if you want confidentiality. Documents with language such as, "this agreement does not create a confidential relationship" or "the disclosure of information is not made in confidence" represent waiver agreements.