The stack of paperwork you get on your first day almost always includes a confidentiality agreement. It looks like a formality, but when a departing employee later walks out with company materials, it's one of the few pieces of evidence the company can put forward.
The short version
A confidentiality agreement is evidence that the company has managed its information as confidential. To be protected as a trade secret, information must have been "managed as a secret," and the agreement is used as evidence of that, together with security policies, access restrictions, and training. A single signed agreement isn't enough on its own, though, so it's important to keep it alongside records showing you actually managed the information.
What it takes to be a trade secret
Article 2(2) of Korea's Unfair Competition Prevention and Trade Secret Protection Act defines a trade secret by three requirements.
| Requirement | Meaning |
|---|---|
| Not publicly known | Not generally known to the public |
| Economic usefulness | Has independent economic value |
| Confidentiality management | Has been managed as a secret |
The confidentiality management requirement has been relaxed through amendments. It went from "considerable effort" in the past to "reasonable effort" in 2015 (Lawwin law firm), and under the amendment effective July 2019 to "managed as a secret" (Shin & Kim). Even with the relaxed requirement, the company still has to show that it did in fact manage the information as a secret.
Evidence that shows confidentiality management
- Confidentiality agreements collected at hiring and departure
- Trade secret management policies and records of actual enforcement
- Restricted access to materials, confidentiality markings
- Records of regular security training
According to published commentary, in a dispute the parties can argue not only over whether a policy existed, but also whether it was actually enforced and whether training actually took place (Lawwin law firm).
What to include in the agreement
- Scope of confidential information: Write in concrete examples such as technical information, customer information, pricing and costs, and business plans.
- Restrictions on use: Prohibit use outside work purposes and disclosure to outsiders.
- No removal: Prohibit moving materials to personal email, cloud storage, or storage devices.
- Return and deletion at departure: Require returning materials and deleting copies on personal devices.
- Duration: State how many years the obligation continues after departure.
- Liability for breach: State liability such as damages.
Some companies also include a non-compete (restricting employment at competitors after departure), but because it touches on the freedom to choose one's occupation, its enforceability can be limited depending on duration, region, and compensation. If you include one, have your legal team or a labor specialist review it separately.
How to collect it at hiring and departure
| Timing | What to collect | Tip |
|---|---|---|
| Hiring | Confidentiality agreement | Same day and same bundle as the employment contract |
| Project assignment | Project-specific agreement (if needed) | Sensitive projects such as core technology or M&A |
| Departure | Departure agreement + confirmation of returned materials | Before the last working day |
If you have several new hires a month, printing the same agreement and collecting it one person at a time takes quite a bit of time. With e-signatures, you can send the same document to multiple people at once, so sending, collecting, and storing are done in one go, and there's a record of who signed and when. Retention periods for employment-related documents are covered in contract retention periods.
According to public materials, PRIX says it supports identity verification, e-signatures, audit trail certificates, and permission management (HelloT). If all you need is to collect the agreement, any e-signature service will do; if you need to find and manage agreements by employee and by project, it's worth looking at storage and search features as well.
Alpaca's takeaway
With confidentiality agreements, "can you show later that you collected it" matters more than collecting it. Check whether you can find the agreement of one employee who has already left within 5 minutes.
🦙 That was Researcher Alpaca's research notes. This post is a general overview and not legal or labor advice for individual cases. If anything is wrong or you have more questions, let me know via 'Contact Josh' below.
Related reading
- NDA management: 3 things that are easy to miss from signing to expiry
- Legal validity of e-contracts: how do they differ from paper contracts?
Sources
- Commentary on the amended definition of trade secrets (Shin & Kim) — effective July 2019, "managed as a secret"
- Confidentiality management of trade secrets (Lawwin law firm) — 2015 amendment, confidentiality agreements and other evidence
- AI-based contract management SaaS 'PRIX' (HelloT) — identity verification, e-signatures, permission system
