Actions to pursue in breaches of confidentiality agreements

by | Jun 10, 2021 | Business Litigation

Companies rely on confidentiality agreements to protect their products, secrets, trademarks, patents, processes and operations. Sometimes called secrecy or non-disclosure agreements, these accords are a necessary aspect of any business.

Why? Protection of the inner workings of a business, plain and simple. Your company wants to maintain its distinction of being better than competitors, offering better products and services. However, in a scenario reminiscent of an espionage case, you may have what you thought was a trusted employee. Then you learn that that that person has gone rogue. If that is the situation, you may consider certain options, including a lawsuit.

Lawsuits and penalties

What can you do when an employee violates the terms of a confidentiality agreement? Immediately gather evidence, give a thorough review of the agreement and work with a seasoned attorney whether that person is in-house counsel or an outside attorney.

Here are some actions that you can take:

  • File a lawsuit: In some cases, a confidentiality breach leads to irreparable harm to a company. This is when it is time to pursue a lawsuit against an employee to seek monetary damages. But more realistically, pursue legal action against any companies that benefited from your trade secrets. Were trade secrets sold? Was confidential information provided to a company that the employee sought employment? Then pursue this route.
  • Seek specific penalties: In some situations, the terms of a confidentiality agreement dictate the type of penalty. For example, the person who violated the agreement may have – by signing the agreement – agreed to pay a certain amount of money as a penalty.

It may take some time for your company to recover from the breach of a confidentiality agreement. But you had one in place for a reason: protecting your company from dishonest employees. Consider what needs to be done and then immediately act.