Confidentiality Clause in Employment Contracts: What You're Agreeing To
What This Clause Does
Nearly every employment contract includes a confidentiality clause, and most of the time it's reasonable. You're agreeing not to share the company's trade secrets, customer lists, pricing strategy, and internal processes with outsiders. This obligation typically continues after you leave.
The key question is how broadly "confidential information" is defined. A good clause limits it to information the company treats as confidential and marks or communicates as such. A bad one covers everything you ever learn at work, which could prevent you from using general skills and knowledge in your next job. Look for a carve-out for information that's already publicly known.
Example Clause Pattern
"Employee agrees to hold in strict confidence all Confidential Information of Company. 'Confidential Information' means any information disclosed by Company that is designated as confidential or that reasonably should be understood to be confidential given the nature of the information and circumstances of disclosure."
What to Watch
- No time limit on the confidentiality obligation after employment ends
- Definition covers general skills and knowledge, not just specific company secrets
- No carve-out for publicly available information
- Covers information you had before joining the company
What to Negotiate
- Ensure the definition of "confidential information" excludes general skills, industry knowledge, and publicly available information
- Negotiate a reasonable sunset on post-employment confidentiality obligations — 2 to 3 years is standard, perpetual is not
- Add a carve-out for information you knew before joining or that you developed independently
- Request a narrow definition tied to information the company specifically designates or marks as confidential
Need a Contract Template?
If you need a lawyer-reviewed template for this type of agreement, these services can help.
Rocket Lawyer
Lawyer-reviewed templates for individuals and small businesses
LegalZoom
Legal documents drafted with attorney guidance
LawDepot
Customizable legal documents — fill in the blanks, download instantly
Affiliate links — KlausClause may earn a commission at no cost to you.
Found in These Contracts
This clause commonly appears in the following contract types:
Frequently Argued Questions
What is a confidentiality clause in an employment contract?
An employment confidentiality clause obligates you not to share the company's proprietary information — trade secrets, customer lists, financial data, internal processes — with people outside the company. It typically applies both during and after your employment. Most confidentiality clauses are reasonable and standard; the issues arise when the definition of "confidential information" is so broad that it covers your general professional knowledge.
How long does an employment confidentiality obligation last?
Most employment NDAs don't have a fixed expiry for the confidentiality obligation itself — they require you to protect information indefinitely or for as long as it remains confidential. Trade secret protection is unlimited under law. For ordinary business information, a 2 to 3 year post-employment period is more defensible. Courts in some states have refused to enforce unlimited confidentiality obligations on information that lost commercial value over time.
Can a confidentiality clause prevent me from using skills I learned on the job?
A properly written confidentiality clause should not restrict general skills and knowledge you gained through experience. The obligation covers specific company information (customer lists, pricing, unreleased products) — not your professional competence as a developer, marketer, or analyst. If your clause broadly covers "any information learned during employment," push back to narrow it to specifically designated confidential materials.
Negotiation Strategies
Add a sunset clause limiting post-employment confidentiality to 2-3 years
Ensure general industry knowledge and skills are explicitly excluded
Have a contract with this clause?
Upload it and get plain-English explanations and risk scores for every clause.
Upload your contract for a full analysis