This clause requires employees (or sometimes contractors or agents) to complete training on confidentiality obligations, non-disclosure requirements, and proper handling of sensitive information. The training typically covers what information is considered confidential, who can access it, how to protect it, consequences of unauthorized disclosure, and the employee's legal obligations under the contract and applicable law. The clause may specify that training must occur before the employee accesses confidential materials, at regular intervals (annually), or upon request. This matters because it demonstrates that the company took affirmative steps to inform employees about their confidentiality duties, which strengthens legal enforceability of non-disclosure agreements and trade secret protections. Courts are more likely to find that confidentiality obligations are reasonable and enforceable if the company can show employees received clear training.
Beyond legal protection, confidentiality training reduces the risk of inadvertent disclosure by ensuring employees understand what information is sensitive and why. It creates a documented record that the employee acknowledged their obligations, which is valuable if a breach occurs and the company needs to pursue legal action. Training also establishes a culture of information security and can reduce insurance liability by demonstrating reasonable precautions.
Ensure the clause specifies who must complete training (all employees, only those accessing confidential data, new hires, etc.) and when training must occur (before access, within 30 days of hire, annually, etc.). Require that training be documented with attendance records, sign-off sheets, or completion certificates that the company retains. Consider whether training should be in-person, online, or both, and ensure content covers the specific types of confidential information relevant to your business. Include language requiring employees to acknowledge they understand their obligations and the consequences of breach. For real-estate contexts specifically, clarify what information is confidential (client lists, property details, transaction terms, financial information) and how it differs from public records. Periodically update training content to reflect new risks or regulatory changes.
Frequently Asked Questions
What does this clause mean in simple terms?
This clause requires employees (or sometimes contractors or agents) to complete training on confidentiality obligations, non-disclosure requirements, and proper handling of sensitive information. The training typically covers what information is considered confidential, who can access it, how to protect it, consequences of unauthorized disclosure, and the employee's legal obligations under the contract and applicable law.
Why should I care about this clause?
The clause may specify that training must occur before the employee accesses confidential materials, at regular intervals (annually), or upon request. This matters because it demonstrates that the company took affirmative steps to inform employees about their confidentiality duties, which strengthens legal enforceability of non-disclosure agreements and trade secret protections.
What are my options?
Courts are more likely to find that confidentiality obligations are reasonable and enforceable if the company can show employees received clear training. Beyond legal protection, confidentiality training reduces the risk of inadvertent disclosure by ensuring employees understand what information is sensitive and why.
How does this affect small businesses?
It creates a documented record that the employee acknowledged their obligations, which is valuable if a breach occurs and the company needs to pursue legal action. Training also establishes a culture of information security and can reduce insurance liability by demonstrating reasonable precautions.