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Considering asking all employees to sign a confidentiality agreement


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#1 KRG

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Posted 11 September 2019 - 09:01 PM

Greetings,

We are a small company - growing little by little - and now considering asking all employees to sign a confidentiality agreement. Our Office/HR Manager has never required this before and would like to know what may be pertinent to include. Our concerns are pricing, internal processes, etc. Any additional suggestions are welcomed. Thank you!



#2 QAGB

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Posted 11 September 2019 - 09:54 PM

I've never been too involved with confidentiality agreement creation, but I would certainly include formulas in this. 



#3 pHruit

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Posted 12 September 2019 - 08:04 AM

I can't give detailed specifics about our confidentiality agreements, due to the confidentiality agreement that I've signed ;)

But as a rough guide, some key topics to think about are:
Raw material and finished product pricing, and profit margins.
Product formulations

Supplier contact details

Customer contact details

Business processes

Other pertinent intellectual property relating to your company (designs, marketing materials etc)

I've seen several places use a clause about general "know-how", although I'm still sceptical as to how enforceable it would actually be in court due to the obvious challenges around proof of what know-how has been acquired where.

 

At the same time as we first had this implemented, some of us also had non-compete clauses added, and some more substantial wording on ownership of IP, patents etc developed in the course of work duties - these may also be something you want to think about.

 

If your HR people aren't overly familiar with writing these types of things then it's possibly worth getting advice from a lawyer - they may (a) think of things you didn't, and (b) help with writing something that achieves the desired purpose. My solicitor burst out laughing the first time I was given a contract with these types of things in, as the wording may have made the board and HR team happy, but it wouldn't have actually accomplished much for them.



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#4 KRG

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Posted 12 September 2019 - 09:12 PM

Thank you for your help you guys!

pHruit, I really appreciate the suggestions. And yes, I was a little too general when I mentioned "internal processes"  - I basically meant our formula/recipe/process. I really like what you wrote about profit margins and intellectual property, thank you!



#5 GMO

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Posted 13 September 2019 - 11:03 AM

It's worth considering photographs, i.e. not permitting anyone to take photographs on site except for work use, not sharing anything on social media which could divulge confidential information. 

 

I agree it's worth getting a lawyer to check it over though.  Unduly draconian rules may ironically make it less likely to stand up in court.  I was once on the receiving end of a settlement agreement the solicitor said was unenforceable because of the wide range of non applicable rules they'd put in.



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#6 pHruit

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Posted 13 September 2019 - 11:46 AM

Great points, GMO.

Once you venture into the world of more robust contracts, it can throw out other bits that possibly need to be addressed in parallel / prior to implementation. If control/protection of company IP is a more significant agenda item then a general Social Media policy and a site photography policy can be very useful. The former can of course extend beyond just protection of IP and into online conduct when acting, or when seen to be acting, on behalf of the business. But again it can be a bit of a minefield as there is potential to overreach what is reasonable, and inadvertently draft something that is unenforceable as it is too restrictive of the rights of the individual and potentially therefore also expose the company to liabilities as a consequence. Another one to have a lawyer check over, if you don't have the in-house expertise ;)






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