The importance of confidentiality agreementsQ: Dear Rhee,
I have loved almost every minute of the 33 years I’ve owned my studio. Last year I married a wonderful man whose job includes lots of travel, and I would like to join him as often as possible. He has always told me that I don’t have to keep running my business and teaching unless I want to. Never did I think that I would stop doing either, but I recently made the decision to sell the business. If I can continue to teach, I will.
I approached two of my teachers to see if they might be interested in forming a partnership to buy the studio together. I thought they would make a good team, and together, they could probably afford to make it happen. Now they are both mad at me because I didn’t choose one or the other to individually buy the business. Our friendship, which I thought was strong, is now strained because of this and it has caused me some headaches.
In the beginning, I explained that our meetings were confidential, which they both said they understood. But one of them has betrayed my trust—she has started talking about the meetings to her friends, some of whom are studio clients. Although my lawyer told me to have both of them sign confidentiality agreements, I really believed that I could trust them, so I did not ask them to sign. Obviously that was a big mistake on my part.
Longtime clients are now asking what’s going on with the studio because they’ve heard rumors that I am selling. I can’t express how hurt I am by the teacher who spilled the beans and how uncomfortable the situation has become, because now I’m denying a rumor that is actually true.
Out of loyalty, I suggested selling the business to the two teachers who had been with me the longest. Now I want to approach another studio owner who I think would be interested in buying, but I’m afraid that my teachers will find out and feel that I betrayed them. It seems like I’ve created a mess that keeps getting worse with each day. What advice can you offer me? I don’t know what to do next and I don’t want any more controversy. Thanks in advance. —Claudia
A: Dear Claudia,
Good for you for finding love and deciding to make the life you want for yourself. Not everyone can do that.
As you said, you should have had these teachers sign the confidentiality agreement, but that’s in the past. In my opinion, the teacher who has been gossiping with others about your intention to sell needs some sort of reprimand. Not only has she betrayed your trust, but she could potentially hurt the business. I would sit down with her to explain that if she continues gossiping, you will have no alternative but to let her go. And I would continue to deny that you’re considering selling until you can offer clients some definitive information to calm their nerves about the changes. That’s why the confidentiality agreement is so important.
If you believe that the teacher who has kept silent may be interested in purchasing the business alone, you could pursue that option. But if you don’t feel you can trust her either, move on. If you choose to seek alternative buyers, I would tell the two teachers who you originally approached that you are going to hold off on selling for a while and then never discuss the sale with them again. Hopefully the gossiping teacher will start spreading the rumor that you are not selling.
If you decide to approach the studio owner who you believe would be interested in purchasing your studio, please have your agreement in tow before you start talking. However, I would suggest you ask your lawyer to make the initial contact instead of doing it yourself. If the owner is interested, the lawyer can start the negotiating process by having the owner sign the confidentiality agreement, and you will be in a much better situation with all the legalities in place. —Rhee