At the outset of most employment relationships, the employer will have an employee sign a litany of documents ranging from a IRS form W4 to a non-compete agreement. Buried within those documents is usually some form of a confidentiality agreement. Within the agreement the employee agrees not to share any of the employer’s confidential information while an employee and after they depart. Sometimes the agreement is referred to as a non-disclosure agreement or NDA. Here is an example of a clause from such an agreement:
1. The Parties shall (i) use reasonable efforts to maintain the confidentiality of the information and materials, whether oral, written or in any form whatsoever, of the other that may be
reasonably understood, from legends, the nature of such information itself and/or the circumstances of such information’s disclosure, to be confidential and/or proprietary thereto or to third parties to which either of them owes a duty of nondisclosure (collectively, “Confidential Information”); (ii) take reasonable action in connection therewith, including without limitation at least the action that each takes to protect the confidentiality of its comparable proprietary assets; (iii) to the extent within their respective possession and/or control, upon termination of this Agreement for any reason, immediately return to the provider thereof all Confidential Information not licensed or authorized to be used or enjoyed after termination or expiration hereof, and (iv) with respect to any person to which disclosure is contemplated, require such person to execute an agreement providing for the treatment of Confidential Information set forth in clauses (i) through (iii). The foregoing shall not require separate written agreements with employees and agents already subject to written agreements substantially conforming to the requirements of this Section nor with legal counsel, certified public accountants, or other professional advisers under a professional obligation to maintain the confidences of clients.
Usually you see the agreement come into play as part of a bad employee departure. Employee leaves employer and then proceeds to use “confidential information” in a new venture. The confidentiality agreement might be part of a larger non-compete fight or may serve as the basis for a lawsuit itself. There is always a fight over what is or isn’t “confidential information” or a trade-secret.
This brings us to the real world sports example of former ESPN announcer Adnan Virk. Virk was a rising star in ESPN’s announcing cadre. On February 1, he was escorted to his desk at ESPN’s Bristol, Connecticut headquarters where he was allowed to remove his personal items and then escorted off site – typical over the top employee departure. All reports indicate he was fired for leaking confidential information about ESPN”s baseball coverage that turned up in a news story. The information was considered confidential by ESPN. So ESPN fired him with no severance. Virk recently denied the accusations and stated his lawyers were meeting with ESPN’s lawyers to resolve the matter. So it goes…
I suspect Virk signed a confidentiality agreement and ESPN claims he breached it. How the matter is resolved remains to be seen but we will continue to follow it. The ESPN example illustrates the importance of these types of agreements and underscores the fact that companies should continue to train/educate employees on confidentiality so they can protect their own confidential information or information of clients/customers.