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Small Business Employee Policies Series: Employee Confidentiality Policy

Protecting trade secrets is an imperative for every company. This article discusses some of the things you may want to consider in drafting a confidentiality agreement to bind your employees.

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Do You Need An Employee Confidentiality Agreement?

Some things to think about when considering whether or not to implement an employee confidentiality policy for your business:

  • Do some or all of your employees have direct access to sensitive or proprietary information?
  • Is the information that your employee is exposed to of interest to a competitor?
  • Will the information, if leaked or handled carelessly, negatively impact your customers, clients, or company?
  • Regardless of the type of information, will it be a potential hardship to the organization if the information is used inappropriately?

If you can answer yes to even one of these questions, then you should seriously consider creating a confidentiality policy for your company.

The confidentiality policy should summarize your company’s expectations and your employees’ responsibilities when handling confidential or proprietary information.  Some tips for creating your policy:

  • Summarize what constitutes as confidential or proprietary information for your company.  For most businesses, this may include financial, personal or demographic information, as well as specific proprietary information.
  • Describe the importance of how the information should be handled and be sure to communicate to your employees your company’s criteria.  For example, if it is critical that personal or business files not be left in an easily accessible area such as a desk or in public place, or, if employees are required to log off of their computers before leaving their work areas make sure that staff are clear about these specific requirements.
  • Highlight the fact that the policy is a summary of information.  Emphasize that it is expected that employees check in with their supervisor, or the appropriate administrator if there is any question about whether the information that they are handling is confidentialFind Article, or if the employee has any questions about how the information should be safeguarded.
  • Have employees sign your confidentiality agreement and place the signed agreement in the employee’s personnel file.
  • Include the confidentiality agreement in your orientation process.  Have all new employees review and sign the form during the period of time that the employee is completing other new hire paperwork.
  • Make sure that the employee confidentiality agreement is posted on your internal website and in any company policy and procedure or employee manuals.

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Dianne Shaddock is the Founder of Easy Small Business, a website which provides “Quick and Simple Human Resources Strategies for Small Businesses, Non Profits, and Entrepreneurs.  Go to for more tips on how to hire and manage your staff more effectively.

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