Legal Question in Business Law in New York

Re: confidentiality agreement

The idea of a confidentiality agreement is for each party to keep quiet about the confidential information they get from the other party. Not to do so harms the party whose confidential information has been disclosed. Businesses take these agreements very, very seriously; confidentiality agreements are vigorously enforced against employees, contractors, strategic partners, and others to whom confidential information must be disclosed in the performance of the business's activities.

Breach of a confidentiality agreement means that harm has been done to the injured party that cannot be completely (or often even partially) fixed by throwing money at the problem; this clause states that injunctive -- behavioral -- relief is ok and expected gives the court the latitude to enforce the contract by requiring the breaching party to stop breaching the contract. The court can also require that the breaching party pay money damages to the injured party. Thus, this clause gives the injured party the possibility of a two-pronged remedy: the breaching party may have to pay money (usually significant money) and the breaching party may be required to change his/her behavior.

Breach of a confidentiality agreement is a "verbal act" (different from "free speech"). Verbal acts are not protected by the First Amendment of the US Constitution. Thus, the court is not in violation of the First Amendment when it requires the party who breaches the confidentiality agreement to shut up about the confidential information covered by the contract.

Hope that helps.

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