The Role Of Confidentiality Agreements In Divorce

| Aug 24, 2020 | Property Division

In the past few years, confidentiality agreements have garnered a bad reputation. In the wake of the #MeToo movement, it became apparent that rich and powerful men were using confidentiality agreements to hide sexual harassment allegations and litigation from the public. Needless to say, this is not an appropriate use of these agreements.

But confidentiality agreements do have many legitimate uses, sometimes including property division in high-asset divorces. If you are a business owner or high-level executive needing to disclose sensitive company information for property division purposes, you may want consider seeking a confidentiality agreement to protect that information from leaking out during or after the divorce.

This was the subject of a recent Forbes article. The authors note that, as a general rule, a confidentiality agreement should cover any business information that either would not be publicly available or would not be available to your spouse outside of a divorce context. Examples would include sensitive client data or the company’s non-public financial information.

The value of a confidentiality agreement in this context is that it allows your attorney and your spouse’s attorney to access sensitive information for purposes of ensuring a fair division of property. At the same time, however, it safeguards the information from public view, decreasing risks to the company and to your job (if you were worried about information leaking out during proceedings). In some cases, a confidentiality agreement may be required by your company before you can even access sensitive company financial data.

High-asset divorce is complex, requiring considerable research and information gathering during the discovery process. Therefore, you’ll want to hire an attorney who is skilled and experienced in high-asset divorce for business owners and professionals.

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