Many in business will sign a non-disclosure agreement when they join or leave a company, but it does not occur to those same people that it might be a good idea to do this with their divorce. Both are a termination of a partnership or working relationship, but personal lives are different. Nonetheless, there may be many financial documents and other sensitive information provided to the spouse’s team. It can include information about a company’s financials, personal details about the marriage, or other information that one would never discuss with friends or family.
From a business perspective, partners, owners, members of an LLC or an employee at a company may need to take steps to protect the business.
How it works
Confidentiality agreements will apply to sensitive documents labeled as “confidential.” Typically, this means that no one beyond the couple, their attorneys, expert witnesses, and the court where the litigation is pending should be privy to the information. This prevents sharing gossip with friends and family, posting information on social media, or sharing details with anyone else.
The couple will both sign the agreement acknowledging that there will be harm in sharing the confidential information. It will also stipulate the consequence of breaching this agreement, which likely starts with an injunction and could involve financial penalties. Once the case concludes, the other spouse should not retain the information, although their attorney may wish to keep their records.
Potential issues can arise
A business owner going through a divorce may have an offer or more than one offer to buy the business, which may be shared as part of the discovery process. This information can impact the owner’s ability to sell if the bid’s amount is made public. Employers who require confidentiality generally limit the information to the attorney who reviewed their contract and the employee, so there may need to be an additional agreement regarding the legal teams involved in the divorce before the company shares financial information.
Best to be cautious
It may seem like overreach or paranoia to worry about your financial circumstances. But it is at least something you should consider when negotiating or litigating a divorce. An experienced, Board-Certified Family Law expert attorney can help the client determine whether a confidentiality clause is necessary. They can also address these agreements when the company or the other party insists on using one.