An employer in Texas may require a confidentiality agreement when they hire new employees. This agreement is a legally binding contract that states an employee cannot disclose information about the company’s activities or propriety. The contract usually stays in effect for one to three years or as long as the employee works for the company. It can also stay binding for a time period after an employee leaves.

Other situations where a confidentiality agreement could apply

A confidentiality agreement may apply when senior managers disclose company activities during an interview, and employees sign the agreement in advance. A person usually needs to sign a confidentiality agreement regarding discussions of products that result from assignments before consultants or contractors start work. It could also apply to vendor discussions about parts, stock purchases and other confidential information.

What the confidentiality contract may include

A confidentiality contract usually states that an employee cannot disclose sensitive company information nor profit from it. The agreement commonly has a clause that states they cannot work for a competitor for specified time after leaving. This protects confidential information, which could be given to a new employer for the benefit of the former employee or to help the new employer profit from it.

Some contracts could have a clause that forbids an employee from sharing products they devised in their spare time under contracts or employment. However, the agreement should have a waiver about sharing their created products with competitors.

A confidentiality agreement might be too restrictive, or an employer could try to enforce one years after hiring an employee. To avoid business disputes resulting from these situations, an employer or employee may have a business law attorney check the terms of the contract.