Ready to use legal template

Drafted by experienced lawyers

Compliant with Filipino law

Ready to use legal template

Drafted by lawyers

Compliant with Filipino law

HomeEmployeesEmployee confidentiality agreement

Learn more about Employee Confidentiality Agreement in Philippines

Using an Employment Confidentiality Agreement in the Philippines is important for protecting a company’s trade secrets, proprietary information, and Intellectual Property from unauthorized disclosure. It can help prevent employees from using confidential information to gain a competitive advantage or to benefit a competing business. Confidentiality agreements can also help build trust between employers and employees by ensuring that sensitive information remains confidential. Additionally, confidentiality agreements are often required by investors, partners, and customers as a condition for doing business, so having one in place can help companies build and maintain important relationships.

Table of contents


What is an Employee Confidentiality Agreement?

An Employment Confidentiality Agreement is a legal contract between an employer and an employee in the Philippines that aims to protect the employer’s confidential information from being disclosed to unauthorized parties. This agreement typically covers a wide range of confidential information, including trade secrets, proprietary information, financial data, and customer lists.

Under this agreement, the employee agrees not to disclose any confidential information to third parties, including competitors, during and after their employment. The agreement may also include provisions that restrict the employee from using the confidential information for personal gain or for the benefit of others.

Employment Confidentiality Agreements are generally used to protect the Intellectual Property and trade secrets of the employer. This can include, for example, customer lists, business strategies, product designs, and manufacturing processes. In the event that an employee breaches the confidentiality agreement, the employer can seek legal remedies, such as injunctive relief, damages, or both.

It’s important to note that Employment Confidentiality Agreements in the Philippines must comply with the country’s Labor Laws, particularly on the employee’s right to privacy and freedom of expression. Employers must ensure that the terms of the agreement are reasonable, clear, and not overly restrictive, and that employees fully understand what they are agreeing to before signing the agreement.

Why using an Employment Confidentiality Agreement is important?

1. Protecting Trade Secrets

Confidentiality agreements help protect the trade secrets and proprietary information of a company. These may include customer lists, pricing strategies, product designs, and other sensitive information that gives a business a competitive advantage. By requiring employees to sign a confidentiality agreement, a company can ensure that their confidential information remains confidential and does not fall into the hands of competitors.

2. Preventing Disclosure of Sensitive Information

In some cases, employees may have access to sensitive information that, if disclosed, could harm a company’s reputation or even put it out of business. By requiring employees to sign a confidentiality agreement, a company can limit the risk of this information being disclosed to the public or unauthorized parties.

3. Protecting Intellectual Property

Confidentiality agreements can help protect a company’s intellectual property, including Trademarks, Copyrights, and Patents. This is particularly important for companies that rely heavily on their Intellectual Property, such as technology firms or creative businesses.

4. Legal Protection

By having a confidentiality agreement in place, a company can take legal action against employees who violate the agreement. This can include seeking damages or injunctive relief to prevent further disclosure of confidential information.

What are the legal considerations for NDA in the Philippines?

There are several legal considerations that should be taken into account when drafting an Employment Confidentiality Agreement in the Philippines. These include:

Compliance with Labor Laws: Confidentiality agreements must comply with Philippine labor laws. This means that the terms of the agreement must be reasonable, not overly restrictive, and not in violation of an employee's rights to privacy and freedom of expression. It is also important to ensure that the agreement does not prevent an employee from engaging in any lawful profession or trade.
Clarity and Specificity: The confidentiality agreement should be clear and specific in defining what information is considered confidential, and what actions are prohibited. This will help ensure that employees fully understand their obligations under the agreement and what is expected of them.
Consideration: A confidentiality agreement is a binding contract, and as such, it must be supported by consideration. Consideration refers to the benefit that the employee receives in exchange for signing the agreement. In most cases, the employee's continued employment is considered sufficient consideration.
Enforceability: Confidentiality agreements must be enforceable in court. This means that the terms of the agreement should not be overly broad or vague, and the agreement should be reasonable in scope and duration.
Confidentiality Obligations after Employment: Confidentiality obligations may continue after an employee's employment has ended. However, the agreement should specify the duration of the post-employment obligations, which should be reasonable and not unduly restrictive.
Proper Execution: Finally, the confidentiality agreement should be properly executed. This means that the agreement should be signed by both the employer and the employee, and the employee should be given sufficient time to review and understand the terms of the agreement before signing.

How to write a Non-Disclosure Agreement for your employee?

Writing a Non-Disclosure Agreement (NDA) for employees in the Philippines involves several key components. Below is a step-by-step guide to writing an NDA:

Step 1. Identify the parties involved

The NDA should clearly identify the employer and employee who are parties to the agreement.

Step 2. Define the confidential information

The NDA should define the types of information that the employee is prohibited from disclosing or using, such as trade secrets, proprietary information, customer lists, or financial data.

Step 3. Specify the purpose of the agreement

The NDA should clearly state the purpose of the agreement and how the confidential information will be used by the employee.

Step 4. Describe the obligations of the employee

The NDA should describe the employee’s obligations, such as keeping the information confidential, refraining from disclosing the information to unauthorized parties, and using the information only for the purposes specified in the agreement.

Step 5. State the exclusions from confidentiality

The NDA should state any exclusions from confidentiality, such as information that is already in the public domain, or information that the employee can prove was already known prior to employment.

Step 6. Specify the consequences of breach

The NDA should clearly state the consequences of breach, which may include termination of employment, legal action, and damages.

Step 7. Include a term and termination clause

The NDA should specify the term of the agreement and how it may be terminated, such as by mutual agreement, expiration of the term, or breach of the agreement.

Step 8. Signatures

The NDA should be signed by both the employer and employee to signify their agreement to the terms.

When writing an NDA, it is important to seek legal advice to ensure that the agreement complies with Philippine Laws and Regulations. Additionally, the NDA should be tailored to the specific needs of the employer and employee and should be reviewed periodically to ensure that it remains relevant and effective.

What does a Confidentiality Agreement cover?

A confidentiality agreement, also known as a non-disclosure agreement (NDA), covers a range of confidential information that an employer wants to protect from unauthorized disclosure by employees or third parties. In the Philippines, a confidentiality agreement typically covers the following types of information:

Trade secrets: This includes any information that provides a business with a competitive advantage and is not known to the public, such as formulas, processes, techniques, or methods.
Proprietary information: This includes any information that is owned by the company and not readily available to the public, such as customer lists, marketing strategies, financial data, or employee information.
Inventions and intellectual property: This includes any inventions, patents, copyrights, or trademarks that are owned by the company and that the employee has access to as part of their employment.
Business plans and strategies: This includes any confidential business plans, marketing strategies, or other plans for growth and development.
Personal information: This includes any personal information about employees, such as salaries, benefits, medical records, or performance evaluations.

A confidentiality agreement typically prohibits employees from disclosing or using any confidential information that they learn during the course of their employment. It also prohibits employees from disclosing confidential information to third parties, including competitors or the public. The agreement may specify the consequences of breach, which may include termination of employment, legal action, and damages.

It is important to note that while a confidentiality agreement can provide some level of protection for confidential information, it is not foolproof. Employers should take additional steps to safeguard their confidential information, such as limiting access to sensitive information, implementing security protocols, and monitoring employee activity.

What are the consequences of breaching Employment Confidentiality Agreements in the Philippines?

The consequences of breaching Employment Confidentiality Agreements in the Philippines can be both legal and non-legal. Some of the potential consequences are:

1. Legal action: The employer may take legal action against the employee for breaching the confidentiality agreement. This can include filing a lawsuit for damages, seeking injunctive relief to prevent further disclosure of confidential information, or pursuing criminal charges if the breach involves trade secrets or other intellectual property.

2. Employment Termination: The employer may terminate the employee’s employment for breach of the confidentiality agreement, as long as the agreement allows for termination as a consequence of such breach.

3. Damage to reputation: Breaching a confidentiality agreement can damage the employee’s reputation, as well as the employer’s reputation if confidential information is disclosed to third parties.

4. Loss of business: The employee’s salary, allowances, and other forms of compensation, such as bonuses, overtime pay, and leave benefits.

5. Fines and penalties: If applicable, the length of the probationary period, during which the employee may be terminated without cause.

6. Unfair competition: If the breach involves the employee using confidential information to compete unfairly against the employer, the employer may pursue legal action for unfair competition.

How Employment Confidentiality Agreements can safeguard intellectual property?

Employment Confidentiality Agreements can safeguard intellectual property in the Philippines by protecting the employer’s trade secrets, proprietary information, and confidential data. This is particularly important for businesses that rely on intellectual property for their competitive advantage, such as technology companies, pharmaceutical firms, and creative industries.

The following are some ways that Employment Confidentiality Agreements can safeguard intellectual property in the Philippines:

 1. Defining confidential information

Employment Confidentiality Agreements define what constitutes confidential information, including trade secrets, proprietary information, and other Intellectual Property. This helps ensure that employees understand what information must be kept confidential and not disclosed to unauthorized parties.

 2. Scope of the agreement

The agreement should specify the scope of confidentiality obligations, which could extend beyond the term of employment, to safeguard confidential information even after the employee leaves the company.

 3. Non-disclosure provisions

The agreement should contain non-disclosure provisions that prohibit employees from disclosing confidential information to unauthorized parties, including competitors or the public.

 4. Exclusions from confidentiality

The agreement should also include exclusions from confidentiality for information that is already in the public domain, information that is required to be disclosed by law, or information that the employee can prove was already known prior to employment.

 5. Consequences of breach

The agreement should outline the consequences of breach, which may include termination of employment, legal action, and damages.

 6. Post-employment obligations

The agreement should specify the post-employment obligations of the employee, such as returning or destroying confidential information, refraining from using confidential information for personal gain or to compete with the employer, and maintaining the confidentiality of the employer’s information.

Share information

Why Themis Partner ?

Make documents forhundreds of purposes

Hundreds of documents

Instant access to our entire library of documents for Philippines.

24/7 legal support

Free legal advice from our network of qualified lawyers.

Easily customized

Editable Word documents, unlimited revisions and copies.

Legal and Reliable

Documents written by lawyers that you can use with confidence.

DOWNLOAD NOW