Confidential information

Many employers treat very seriously the issues of garden leave and
restrictive covenants in respect of senior staff, but often overlook the rather
more prosaic protection afforded by the laws relating to confidential
information. Although there is an implied duty in common law for individuals to
maintain the confidentiality of almost all the employer’s business information
during appointment, and a further obligation after employment to maintain the
confidentiality of the employer’s trade secrets and other confidential
information, it is a fruitful area on which the employer may build in the
contract of employment, to improve its protection.

Confidentiality clauses

A confidentiality clause should always be stated to be without prejudice to
the common law duty – that is, one should be careful not to exclude the implied
duty of confidentiality when drafting an express duty. It should also exempt
protected disclosures under the whistleblowing legislation. But an express
confidentiality clause can flesh out this implied duty and, in practice, make
it much more easy for an employer to protect its confidential information,
particularly after the employment has ended. This is because an employer can be
quite specific about the circumstances in which information may be used or
disclosed and, crucially, can give examples of the type of information it seeks
to protect. This forewarns the employee of the ambit of the confidentiality
duty, and makes it much easier for an employer to obtain, if necessary, an
injunction or an order to deliver up specific information.

Examples of confidential information should be tailored as closely as
possible to the particular contract of employment in which it is to be
inserted. Although employment lawyers will commonly provide boiler-plate
examples of confidential information, it is worth considering adapting them for
a particular job.

Confidential treatment in practice

Even with the best drafted clause, an employer may inadvertently be diluting
his protection by not treating confidential information as confidential on a
daily basis. Documents containing confidential information should always be
marked as such, and there should be a conscious effort to ensure that such
information is not left lying about and is kept securely at all times. If an
employee can show that information, was, in fact, freely left around the office
and not treated as being confidential on a daily basis, it could be very difficult
to obtain a legal remedy in respect of any potential breach.

Practical steps on termination

Apart from drawing the attention of the employee specifically to the
confidentiality obligation in the contracts of employment, an employer may, if
it is suspicious, ask the employee to provide an undertaking – or sometimes
even a sworn statement – that he or she has not taken away any confidential
information, or copies. This can be a useful device on which to rely if
evidence is later obtained that the employee is in breach, because the courts
will be much more sympathetic in terms of granting a remedy.

By Russell Brimelow

Head of the employment group Boodle Hatfield

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