Key Takeaways

  • A confidentiality agreement lawyer ensures sensitive communications and proprietary information remain protected.
  • Attorney-client privilege covers only legal advice, not general business discussions.
  • Confidentiality agreements (NDAs) protect trade secrets, IP, and sensitive data shared in business relationships.
  • Common NDA elements include duration, scope of information, and remedies for breach.
  • Courts may not enforce overly broad agreements that unfairly restrict employees.
  • Businesses often use confidentiality agreements during negotiations, employment, and M&A transactions.
  • Both unilateral and mutual NDAs are used depending on whether one or both parties disclose information.

A lawyer confidentiality agreement is designed to allow clients to have open, confidential communication with their in-house and outside counsel. Any discussion cannot be disclosed to third parties. The agreement is put in place to protect the attorney-client relationship. For the agreement to stand, the following three items must be adhered to:

  • Keeping all communications confidential
  • Protect the attorney-client relationship
  • Allow for transparency when obtaining or providing legal advice

The state where the attorney-client privilege takes place will also dictate the overall parameters. Therefore, it is important that in-house counsel understands the state (or country) stipulations of where their headquarters are located. The same should be done if the attorney practices out of an office in another state (or country).

Attorney-Client Privilege

There are limitations to attorney-client privilege. The privilege applies in the following circumstances:

  • If the client requests legal advice from the attorney.
  • Attorney to attorney discussions that cover legal advice and information related to the client.
  • When legal advice is provided by the attorney to the client.

There is a common misinterpretation by attorneys and clients that anything they write is protected by the attorney-client privilege. It should be noted that privilege is only for legal advice, such as communication that is related to litigation.

In contrast, advice related to business is never privileged, which can be hard to differentiate. To clarify between the two, communication can be labeled to show if it is for legal or business advice. Label the email or document with a phrase like "Attorney-Client Communication: For the Purpose of Legal Advice." Labeling should also apply to any additional documentation that is sent to the attorney. This will prove beneficial if privilege needs to be determined by a judge in the future.

Common Misunderstandings About Privilege

Many clients assume that any conversation or email with their lawyer is automatically privileged. In reality, attorney-client privilege only applies when legal advice is being sought or provided. Business advice, financial planning, or operational discussions—even when discussed with an attorney—may not be covered. Courts may scrutinize communications to determine whether they relate to actual legal counsel or routine business matters.

To avoid disputes, lawyers often advise clients to clearly separate business communications from legal advice. Using subject-line markers such as “Confidential – Legal Advice” can help demonstrate intent if the communication’s privilege is later challenged.

Best Practices of Attorney-Client Privilege

To preserve the relationship and maintain attorney-client privilege, the following should be adhered to:

  • Only share legal advice and communications with those who need to know
  • Communication should remain confidential and internal
  • Information should not be shared outside of the company
  • Determine and understand what is privileged and what is not
  • Confirm all communications are labeled correctly
  • Understand how privilege works in your state
  • Confirm all legal team members understand privilege

When Privilege Does Not Apply

Attorney-client privilege has notable exceptions. Communications are not protected if:

  • They are made in the presence of third parties not essential to the legal discussion.
  • The advice is sought for furthering a crime or fraud.
  • The communication relates only to business strategy, not legal guidance.
  • The client waives privilege, either intentionally or inadvertently, by sharing the information with others.

Understanding these limits helps clients avoid mistakes that could cause sensitive information to lose legal protection.

Confidentiality Agreements in Business

Employment contracts often include a confidentiality agreement. This type of agreement, also known by the names nondisclosure or secrecy agreement, is used to protect and maintain the confidentiality of the company's intellectual property. Confidentiality agreements are also used between business partners when confidential information is shared by inventors and entrepreneurs.

The agreements must be written in a specific manner to be enforceable to protect information ranging from formulas, inventions, trade secrets, and the like. A detailed confidentiality agreement will increase its effectiveness. In comparison to the more restrictive noncompete agreements, a confidentiality agreement is more likely to be enforced.

A well-written confidentiality agreement helps protect a company in keeping important information confidential. If an employee does breach the agreement and shares information with a competitor or publicly, the agreement provides an outlet for legal recourse.

Types of Confidentiality Agreements

Confidentiality agreements generally fall into two categories:

  • Unilateral NDAs: One party discloses information, and the other agrees not to share it. This is common with employers and contractors.
  • Mutual NDAs: Both parties agree to protect shared information. These are widely used in joint ventures, mergers, or collaborative projects.

The choice depends on whether only one side or both will be sharing sensitive information. A confidentiality agreement lawyer can help draft the appropriate form, ensuring enforceability and fairness.

Advantages of Confidentiality Agreements

Confidentiality agreements are critical to the protection of intellectual property, trade secrets, or other proprietary information. The agreements offer more added legal protection than what comes with violating patented or protected information. The company not only protects itself during the employment of the individual, it also prevents information from being shared if the employee leaves the company.

A confidentiality agreement is used to do the following:

  • Prevent the disclosure of private technical or commercial information
  • Prevent patent rights forfeiture
  • Clearly explains information that can and cannot be disclosed
  • Protect trade secrets
  • Protect confidential company financial information
  • Restrict the ability of former employees to share proprietary information

Key Clauses Every NDA Should Include

A strong confidentiality agreement should address:

  • Definition of Confidential Information: Specify what information is protected (e.g., trade secrets, designs, client lists).
  • Exclusions: Clearly note what is not confidential, such as public knowledge or independently developed information.
  • Duration: State how long confidentiality obligations last, often 2–5 years, or indefinitely for trade secrets.
  • Use Restrictions: Limit how the information can be used—only for evaluating a business relationship or completing a project.
  • Remedies for Breach: Define legal remedies such as injunctive relief or damages if the agreement is violated.

These clauses reduce ambiguity and strengthen enforceability if a dispute arises.

What Is Covered and What Is Not Covered

Confidentiality agreements protect the following:

  • Machinery used
  • Developments in technology
  • Secret processes
  • Future plans
  • Ingredients or materials used
  • Pricing
  • Formulas
  • Data
  • Employee-created work products

The agreement may also include additional items that are specifically listed in the agreement.

For the agreement to be valid, it must include reasonable expectations and not be extreme in nature. It cannot be unfair to the employee or overreaching. General knowledge and skills acquired during employment are not considered privileged information.

Enforceability and Limitations of NDAs

Courts will generally uphold confidentiality agreements that are reasonable in scope, duration, and subject matter. However, overly broad agreements—such as those that attempt to restrict an employee from using general skills or knowledge gained on the job—may be invalidated.

Additionally, NDAs cannot be used to conceal illegal activity. For instance, agreements that attempt to prevent whistleblowing or reporting unlawful conduct to regulators are not enforceable. A confidentiality agreement lawyer can review agreements to ensure they comply with state and federal law.

Frequently Asked Questions

  1. What is the difference between attorney-client privilege and a confidentiality agreement?
    Attorney-client privilege protects legal advice shared with a lawyer, while a confidentiality agreement (NDA) protects sensitive business or personal information between parties.
  2. How long does a confidentiality agreement last?
    Most NDAs last 2–5 years, but obligations may be indefinite for trade secrets. The duration should be clearly stated in the contract.
  3. Can an NDA prevent whistleblowing?
    No. NDAs cannot stop someone from reporting illegal or unethical activity to authorities. Such clauses are unenforceable.
  4. Do both parties need to sign a confidentiality agreement?
    Yes, for enforceability. Depending on the situation, the NDA may be unilateral (one-sided) or mutual (two-sided).
  5. Why should I hire a confidentiality agreement lawyer?
    A lawyer ensures the agreement is legally valid, balanced, and tailored to your situation, avoiding overly broad or unenforceable terms.

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