Can an agreement that a California business requires a prospective hire to sign as a prerequisite to employment demand that the worker refrain from divulging proprietary company information regarding processes, technologies and business plans to competitors?
That is a central question and focus of many lawsuits that are brought by both workers and employers across the United States.
Here’s a quick and general answer to the posed question: Yes, courts frequently uphold the legality of confidentiality agreements and secrecy-related provisions in employment contracts, provided that the impositions placed on employees are deemed reasonable.
That, of course, begs this question: What is reasonable?
A recent media article focusing upon restrictive confidentiality agreements maintains that some would-be impositions sought to be placed on workers simply go too far — way too far.
And, moreover, the limitations they seek to impose are not in response to employers’ legitimate fears regarding the loss of critically important company information. Rather, the contractual provisions in some nondisclosure agreements simply seek “to silence employees” on important matters that the general public has a legitimate right to know about.
Like an employee’s knowledge that his or her company is engaging in activities that are working a large-scale fraud upon the public. Like the proof a worker can offer that conclusively demonstrates a company’s involvement in bid rigging, bribery or discrimination against a certain class of workers. And like smoking-gun evidence a worker holds showing a company’s purposeful noncompliance with environmental regulations.
Some nondisclosure agreements are written in good faith and are reasonably tailored to safeguard legitimate business interests.
And some aren’t, with their restrictions being clearly focused upon thwarting whistleblowing activity that can promote public welfare.
A current or former employee with questions or concerns regarding any aspect of a confidentiality agreement can obtain prompt and candid advice — as well as aggressive legal representation, when needed — from an experienced employment law attorney.