When you have sensitive data in your hands, you do not want anyone not authorized to have access to it. You need to ensure that only authorized persons get access to it. Moreover, you need those individuals who have access to such data not to divulge the data that was enclosed in the document carelessly. In which case, you would need a data confidentiality agreement. This would ensure that anyone who has access to such data keeps it to themselves.
Breach of the agreement could result in a lawsuit, so they are obliged to comply. When drafting a data confidentiality agreement, check out the basic confidentiality agreement sample template to help you in drafting an effective data confidentiality agreement.
What is Data Confidentiality?
Data confidentiality can be defined as a rule of conduct that sets out restrictions regarding the sharing of specific information. This data or piece of information may be something that only authorized people in the organization need to know, and they need to be clear with employees that such information should not be disclosed to the public. Data confidentiality can further be categorized into classified, public, or sensitive. Companies need to make all their employees understand these data confidentiality classifications so that they avoid any misunderstandings.
Is a Data Confidentiality Agreement Legally Binding?
Data confidentiality agreements are legally binding agreements that state that both parties involved will not disclose or profit from the data about the institution. A company gives a data confidentiality agreement to a new hire or a contractor to make sure that its trade secrets and any other sensitive information remain confidential.
Types of Data Confidentiality
Agreements have to be made so that all parties involved are obliged to comply with the set terms and conditions as stipulated in the document. There are different agreements about nondisclosure of information such as general confidentiality agreements and employee confidentiality agreements. Data confidentiality, however, is all about organizational information, and they are normally classified as sensitive or public.
- Classified: Data is classified as confidential or classified when if it is compromised, it would cause great harm to the company or would pose a huge level of risk.
- Sensitive: Data is considered sensitive if, when disclosed without consent, it would result in moderate harm or pose a lower risk to the organization and/or the people directly or indirectly involved.
- Public: Data is considered public when it is readily available to everyone, either upon request or through an open post from the organization.
Importance of Data Confidentiality Agreements
Data Confidentiality Agreements are very crucial documents in every organization as it is a mutual understanding between the employer and the employee not to divulge data that is considered classified or sensitive. This way, the company and the people involved are safe from the risk of harm that would result when such information is disclosed without authorization.
There are several advantages of having a Data Confidentiality Agreement, including:
- The data and records include all data that is in the form of a copy or electronic means
- The agreement helps preserve the confidentiality of data by setting the limit for the opening of the same
- The agreement sets the database access prioritization
- In the event of baseless gain by unauthorized access, the damage incurred can be recovered.
How long should the Data Confidentiality Agreement last?
A data confidentiality agreement lasts typically two to four years after the date of termination of the contract. It survives the term of the NDA and may exceed it if and when required by the parties involved. The agreement holds the parties in complete secrecy and may lead to lawsuits is misused.
Tips in Making an Effective Data Confidentiality Agreement
- Make Clear The Scope Of The Agreement: companies usually want to hire advisers and other people within the company. Ensure that you include which people the data can be shared and that the disclosing party is liable to cations of the people they share the data with.
- Provide A Purpose For Disclose: By clearly stating the reason why the data is designated as confidential, you also bound the number of people that are allowed access to it. Make the purpose reasonable and specific.
- Incorporate A Penalty Clause: For you to fully protect you and your company, make sure that you incorporate a penalty clause that clearly outlines what is to be done when either party breaches the agreement.
Free Templates & Samples
Data Confidentiality Agreements, just like any other agreements, such as Basic Confidentiality Agreements, would need to be clear on what data is designated as confidential, who the people they could share with, what happens when the agreement is breached, etc.