What is Employment Confidentiality?

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  • Written By: Jessica Ellis
  • Edited By: Bronwyn Harris
  • Last Modified Date: 19 March 2020
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Most businesses handle confidential information on some level. Whether trade secrets, marketing strategies, or credit card numbers, a business has a reason and right to protect its confidential information, as long as the information is legal. Many employers require new employees to sign an employment confidentiality agreement which ensures that the employee will not disclose any confidential information both during and after employment. Refusing to adhere to an employment confidentiality agreement may be grounds for termination and even legal action in some cases.

Employment confidentiality agreements are usually signed before employment commences. This ensures that the employee knows what he or she is getting into and understands that the job is being given on condition of signing the agreement. Employers should make sure to give the new employee time to read over the agreement and be prepared to answer any questions about the nature of the confidential material at the job.


Some employment confidentiality agreements contain a clause that discusses former employment information. This is very important for both workers and employers, as it protects the integrity of both. Most businesses require that an employee abide by confidentiality rules even after leaving the job for a different position; if a new employer asks an employee to violate confidentiality from another job, it is unethical and sometimes illegal. The former employee clause protects the employee from having to answer these questions and also protects the business from accusations of stealing trade secrets by hiring another company's worker.

It is important to understand that signing an employment confidentiality agreement does not mean that an employee must keep silent about illegal activities. While it is not unusual for unethical companies to threaten workers with termination and lawsuits for revealing illegal business practices to authorities, the employee will usually have legal recourse against such actions. Some regions have enacted “whistleblower” laws to protect employees that disclose illegal practices to the proper authorities.

If a confidentiality agreement is signed, both the employee and the employer should receive a copy. Generally, the company will keep the document in a personnel file with other documentation about the worker. Experts recommend that the employee also hang onto his or her copy and keep it with other important documents for easy review.

It is important for employers to remind workers about the necessity for confidentiality. In situations where it is unclear what information is confidential, consider marking all important emails, memos, and other documents “confidential” to serve as a reminder. This simple matter can prevent accidental leaks of information from occurring.


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Can I discuss and/or answer questions about a previous employer if I signed a confidentiality agreement?

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