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Confidentiality Agreement Questions

Confidential agreement is a legal treaty or agreement between two or more parties who are privy to certain sensitive information, which should not be made available to others outside of this agreement. All the parties involved in the process would have to sign the agreement ascertaining that they would not disclose any of the exclusive information to any other parties. This is also known as a non-disclosure agreement. Many times when signing a confidentiality agreement, people are not sure who this covers and what legalities they could be facing. To know more about issues related to confidentiality agreement, read below the answers provided by Experts.

How does a confidentiality agreement work?

In the U.S, a confidentiality agreement can be used in many ways. A person, who wants to sell his/her assets and /or business, can sign an agreement with the buyer allowing the buyer to examine the confidential papers including bank records and financial books to confirm the value of the asset or business at hand.

An inventor also can sign a deal with other parties to evaluate/license his/her invention. The agreement makes sure that the vital/core information related to the particular invention in question remains secret between the inventor as well as the person evaluating only.

The agreement between an employer and employee is also a type of confidentiality agreement. In this, the employee declares that he/she would not divulge any confidential information related to the job that he/she does on behalf of the employer. In this case, some companies/employers even can ask the employee to sign a non-compete clause which means the employee cannot indulge in any business similarly to the employer even after couple of years of resignation.

In some cases, a person can enter in to such confidentiality agreement, where he/she wants to be protected for providing confidential information.

On what grounds can a confidentiality agreement be terminated or what needs to be done to declare a confidentiality agreement invalid?

In order to terminate a confidentiality agreement, both the parties may use the rescission process by signing a formal rescission document. Once the process is through, it would release both the parties of their obligations related to the agreement. This apart, if one of the parties can prove that he/she was made to sign the agreement under duress, or he/she signed the agreement after being intimidated by the other party, the agreement becomes invalid. But this would need to be proved in a court of law.

Is a non-compete/confidentiality agreement that was signed with one company enforceable once the company is acquired by another company?

In most of the cases the agreement remains enforceable. It all depends on the clauses mentioned in the agreement. A proper review of the agreement papers can clarify the same.

Does a confidentiality agreement enable the company to inspect the personal property of its employees?

Yes, in most cases this is legal. Most of the companies are including such clauses in the confidentiality agreement to safeguard their interest. They reserve the right to inspect computers or other electronic storage devices where sensitive information pertaining to company matters can be stored, whether the electronic repository is owned by the company or the employee.

Does a confidentiality agreement on a business letterhead serve the purpose?

No, most of the time this is not enforceable in the court of law as a confidentiality agreement on a business letterhead is not legally binding.

Can two parties get in to a verbal confidentiality agreement without signing proper documents? Is a verbal agreement legally binding?

Yes, two parties can enter a verbal confidentiality agreement if they want. Such verbal contracts are legally binding, but they are virtually impossible to enforce with the absence of written documents.

Confidentiality Agreements are forms of legal tools used in various organizations. It is always important to go through the entire document before signing to avoid any future trouble. All the clauses in the agreement need to state the purpose of the contract properly and clearly. The process involves the usage legal terms/jargons to make the agreement legally binding and enforceable in the court of law that a layman may not understand. To have a better clarity on issues related to confidentiality agreement, it is always good to consult an Expert who can answer your queries.

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Experience:  JD, BBA Over 25 years legal and business experience.
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Recent Confidentiality Agreement Questions

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    When signing a general release with an attorney, does it mean one can't even complain about this attorney to the disciplinary commette?
  • I was a top performer at my company until the beginning of

    I was a top performer at my company until the beginning of this year when I was put in charge of a very large project. I was also managing an existing area of the business that was already very demanding. The new project overtapped everyone on my team and there was immediate pressure to share plans on how we would deliver... despite having no time to do any planning. In tandem with this I was threatened that I would have to let my team go because they were not funded (all contractors) and was pressured to write position descriptions to hire new people in to replace the existing. Long story short, after just a month I raised up that I needed a project manager and additional staff to help land this project successfully. Instead of getting that, my manager brought in an outside consultant, took my entire team and gave them over to the consultant. I was left to deliver things outside of the project and with no staff to support those deliverables. I built the capability that my team were delivering from the ground up and last year we were praised for the quality of services we provided. All of that was negated by my line manager. The company then decided that we needed a formal change management function and despite running a successful change program for the past 4 years, having and MBA and 10+ years of high performance and building teams, I was not even considered for the new role. As a result, I plan on leaving the company within the next month. I would like to request a severance package when I give my notice. I realize it is unconventional but my health has suffered, my career has been sabotaged and I feel that I have no other choices but to leave the company. What advice do you have about requesting severance?
  • What are the remification of cancel a job offer that I already

    What are the remification of cancel a job offer that I already singed 2 day ago.
    This is the Job Offer
    Joseph Bianchi *****
    Barrington, IL 60010
    Subject: Formal Offer Letter
    Dear *****ph:
    It is a pleasure to offer you a regular full-time exempt position as a Senior IT Associate, Grade 7, in our Chicago, IL office. Your start date will be October 20th, 2014. Upon re-hire your seniority will be reinstated. Greg Modd will be contacting you to schedule your orientation.
    This position offers a gross monthly salary of $9,966.66 which is equivalent to $119,600 on an annualized basis. You will be paid on a semi-monthly payroll cycle ending on the 15th and the last day of the month. You are entitled to the company benefits package, as outlined in the attached Benefit Guide. Your ATO will equal 27 days annually. However, it’s prorated for 2014 based on month of hire. Therefore, based on an October hire date, you will have 7 days of ATO to use upon hire prior to December 31, 2014 (which includes any days you plan to take off in observance of any remaining 2014 holidays).
    This offer includes a sign-on bonus of $15,000 (taxable income). This bonus payment will be processed with your first paycheck. This bonus is reimbursable to PMA Consultants should your employment be terminated voluntarily within one year from your date of re-hire. At such time, by your signature below, PMA is authorized to deduct this bonus amount from any monies due to you, including your final pay and expense reimbursements due.
    This offer is contingent upon your returning a signed copy of this letter and the enclosed Confidentiality Agreement. Please don't hesitate to contact me if you have any questions about this offer. Welcome to PMA!
    Sincerely,
    Natalie R. Brown, SPHR
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    I hereby accept the offer as described above and acknowledge that my employment with PMA Consultants LLC (the "company") is “at will", however it is mutually agreed upon that should PMA issue a notice of termination, it would also include a 45 day severance payment. Alternatively I must provide written notice to PMA 45 days in advance of my last day. I further understand that no employee of PMA Consultants, LLC has the authority to make any verbal statement or representation inconsistent with this written statement or enter into any written agreement for employment for any specified period of time, or that is otherwise contrary to the terms set forth herein.
    In consideration of your employment by PMA as detailed in this offer, you expressly make a commitment to PMA that you will not solicit or accept employment with any PMA Client while on assignment with PMA (or such other Client). Should you breach this commitment, you agree that you shall be liable to PMA in the amount of $15,000.00 in liquidated damages, plus reasonable attorneys’ fees incurred by PMA as necessary to enforce this provision, which amounts you agree represent a fair, reasonable, appropriate and mutually agreed-to estimate of damages PMA is likely to incur, and are not intended as a penalty.
    Signature ___________________________________________________________ Date: ____________________
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