Confidentiality Agreements (NDAs) & Divorce
Updated December 10, 2023
When executives, entrepreneurs, and other high net worth or publicly-known people divorce, their matters require more attention and experience than other divorce cases because of the added intricacies. One of those intricacies is the desire for as much privacy as possible — which often takes the form of a confidentiality agreement. A confidentiality agreement is also called a non-disclosure agreement, or “NDA” for short.
Divorce lawyers have successfully used confidentiality agreements in high-profile divorce cases. For example, Brad Pitt and Angelina Jolie’s divorce and Tiger Woods’ divorce both used NDAs to protect privacy and maintain confidentiality. But they aren’t just for famous people — privacy is extremely important to many people. This is especially true for business people. For example, when Fairfield resident Jack Welsh’s divorce took place in Bridgeport family court, and the filings were fodder for business reporters. There was also extensive media coverage when the chairman and former chief executive officer of United Technologies, West Hartford and then Avon resident George David, and his wife, Marie Douglas-David, divorced in Hartford family court.
Read on for more about confidentiality agreements and divorce.
What Is a Confidentiality Agreement (NDA) and How Does It Work?
A confidentiality agreement, often referred to as a non-disclosure agreement (NDA), is a legally binding contract that establishes the terms and conditions of confidentiality between parties involved in a divorce case. These agreements outline the obligations and responsibilities of each party to maintain the privacy of sensitive information disclosed during the divorce proceedings.
Confidentiality agreements typically include provisions that prohibit the disclosure of any confidential information to third parties, including friends, family members, and the media. They also specify the consequences for violating the agreement, such as financial penalties or legal action.
To be effective, a confidentiality agreement must be signed by all relevant parties, including both spouses and their respective attorneys. This ensures that everyone involved is aware of their obligations and responsibilities regarding confidentiality.
Benefits of Using Confidentiality Agreements (NDAs) in Divorce Proceedings
Confidentiality agreements offer numerous benefits in divorce cases, providing a range of protections for all parties involved. Here are some key advantages:
1. Privacy Protection: The primary benefit of confidentiality agreements is the protection of privacy. NDAs prevent the unauthorized disclosure of personal information, financial records, and other confidential documents related to the divorce. By establishing clear guidelines for confidentiality, individuals can feel more secure and comfortable during the legal process.
2. Open Communication: Confidentiality agreements encourage open and honest communication between the parties involved. When individuals know that their personal information will remain confidential, they are more likely to share relevant details and negotiate in good faith. This leads to more effective communication and can facilitate smoother resolution of issues.
3. Reduction of Emotional Distress: Divorce is an emotionally challenging experience, and the public exposure of personal matters can worsen the distress. An NDA helps mitigate this by ensuring that sensitive information remains private. This allows individuals to focus on the legal aspects of the divorce without the added emotional burden of public scrutiny.
4. Protection from Reputation Damage: Confidentiality agreements help protect the reputation of both parties involved in the divorce. By preventing the dissemination of potentially damaging information, these agreements minimize the risk of reputational harm. This is particularly important in high-profile cases where public exposure can have far-reaching consequences.
5. Preservation of Business Interests: In cases where one or both spouses own businesses, confidentiality agreements are crucial for protecting trade secrets, client lists, and other proprietary information. By maintaining the confidentiality of these assets, the parties can minimize the impact of the divorce on their business operations.
Overall, NDAs provide a comprehensive framework for protecting privacy and ensuring a fair and respectful divorce process for all parties involved.
Read: Privacy During Divorce
Business Records & Divorce
Many business owners prefer to keep business records and information confidential. In other cases, company policy or partnership agreements require them to do so. However, generally, divorcing spouses have the right to seek full and complete disclosure of any and all of their spouse’s relevant financial information. Business information — even when it’s sensitive or intended to remain confidential — can be relevant to many financial matters in a divorce, including property division, alimony, and even child support.
For example, your spouse may need to determine your income stream from a business in order to assess how to approach alimony and child support. Plus, ownership in a business constitutes an asset included in Connecticut property division. That means that the value of the owner’s business stake has to be determined.
Therefore, during the discovery process, expect that there may be document requests for business records, bookkeeper depositions, and/or an appraisal of the business conducted by a business valuation expert. While you will always have a right to object to any specific requests for information in divorce litigation, the court may ultimately require you to produce sensitive information that you (and/or your business) would prefer to keep confidential. This is where an NDAsmay be a helpful tool.
Alternatives to Confidentiality Agreements in Protecting Privacy During Divorce
While confidentiality agreements are the most common and effective way to protect privacy during divorce, there are alternative methods that individuals can consider:
1. Private Mediation or Collaborative Divorce: Instead of going through traditional court proceedings, couples can opt for private mediation or collaborative divorce. Mediation allows parties to negotiate and resolve their issues with the assistance of a neutral third party. Unlike court proceedings, these processes are confidential, and the details discussed during the process remain private.
2. Sealed Court Records: In some cases, individuals may request that certain court records be sealed to protect sensitive information from public disclosure. This can help maintain privacy and prevent public access to personal and confidential details.
While these alternatives can provide some level of privacy protection, they may not offer the same comprehensive safeguards as an NDA. Individuals should carefully consider the specific circumstances of their case and consult with a family law attorney to determine the best approach for protecting privacy.
How To Keep Sensitive Business Records Confidential During Divorce
While it’s very likely that your spouse will have access to your business records during a divorce, how do you keep them from being shared with others? There are three common ways:
- Confidentiality Agreements aka Non-Disclosure Agreements (NDAs)
- Collaborative Divorce or Mediation
- Reaching Agreements Outside of Court
Confidentiality Agreements aka Non-Disclosure Agreements (NDAs)
NDAs are contracts that establish a confidential relationship between the spouse disclosing sensitive information and the spouse to whom the information is being disclosed. Confidentiality agreements typically preclude the requesting spouse from sharing confidential information with any third parties other than attorneys, accountants, or other experts. Sometimes, the disclosing spouse also asks the court to seal the court record to keep information offered into evidence in court private.
Consider Collaborative Divorce and Mediation
One way to keep things private during divorce is to consider the alternative approaches to divorce — collaborative divorce and mediation. Collaborative divorce and mediation keep you out of court, which means limiting the information that becomes public down to the bare minimum. To learn more about the difference between litigation, collaborative divorce, and mediation check out Managing Attorney Meghan Freed’s webinar on “How to Choose Your Approach to Divorce.”
If you already involved in a litigation, an NDA might be an option,
Reach Agreements Outside of Court to Keep Divorce Details Private
Even in litigated divorces, it’s possible and common to reach agreements outside of court on some or all of the issues in their divorce. This is a “low conflict” divorce as opposed to a “high conflict” divorce, or one in which almost all issues require the court’s intervention.
Here are some approaches to reach out of court settlements:
- Negotiation between divorce attorneys
- “Four Way Meetings” between spouses and their lawyers
- “Kitchen Table Conversations” between spouses themselves
In “How to Choose Your Approach to Divorce,” we describe more about how to keep litigation “low conflict.”
Family Law Attorneys and Confidentiality Agreements
When it comes to protecting privacy during divorce proceedings, consulting with a family law attorney is essential. An experienced attorney can provide valuable guidance and expertise in understanding when a confidentiality agreement can be a useful tool to accomplish your goals. They will also understand that the NDA must be tailored to the specific needs of your case.
Divorce lawyers can also provide advice on alternative methods of protecting privacy other than an NDA. Plus, they can guide you through the legal process if someone breaches the agreement occurs.
By working with a family law attorney, people can truly understand their options for privacy during a divorce.
Read: How to File for Divorce
The Role of Confidentiality Agreements in Safeguarding Privacy During Divorce
Although they aren’t very common, confidentiality agreements can play a vital role in protecting privacy during divorce proceedings. NDAs establish a legal framework that ensures all parties involved adhere to strict confidentiality guidelines. The intent is to prevent the unauthorized dissemination of personal information, financial records, and other confidential documents.
Privacy is essential in divorce cases, as it allows individuals to maintain a sense of control and dignity during the legal process. It can even facilitates open communication, reduce emotional distress, and protect reputations. An NDA can offer numerous benefits in this regard. This includes privacy protection, open communication, reduction of emotional distress, protection from reputation damage, and preservation of business interests.
When drafting a confidentiality agreement, it is important to consider legal considerations such as clear and specific language, termination and survival provisions, exceptions and limitations, choice of law, and jurisdiction. Key provisions to include in divorce NDAs are the definition of confidential information, obligations of parties, exceptions and permitted disclosures, consequences of breach, term and termination, and governing law and jurisdiction.
Enforcing an NDA may require documentation of breaches, negotiation or mediation, seeking injunctive relief, and pursuing legal remedies. Alternatives to confidentiality agreements include private mediation, collaborative divorce, or sealed court records. Your attorney can explain the ins and outs of the options.
Consulting with a family law attorney is crucial when drafting a confidentiality agreement. An attorney can ensure an NDA complies with laws and regulations, includes necessary provisions, and can also provide guidance throughout.
In conclusion, confidentiality agreements are an essential tool in safeguarding privacy during divorce proceedings. NDAs provide a legal framework that protects sensitive information, facilitates open communication, and ensures a fair and respectful divorce process for all parties involved.
If you have questions about privacy during divorce generally or NDAs more specifically, please get in touch with our team of divorce attorneys.
Our first step at Freed Marcroft, the Goals & Planning Conference, is designed to get to the heart of your problem and unveil your true goals. Then, we take those goals along with the facts of your case and analyze them so that our divorce attorneys can present you with recommendations and options on how to move forward.