The law relating to confidentiality is rapidly developing in view of the introduction into English law of the European Convention on Human Rights. The courts have been quick to point out that the right to confidentiality must be weighed against the competing right to freedom of expression and it is by no means certain that your company's right to confidentiality will prevail.
An employee is under a duty of confidence irrespective of whether there is an express contractual term. However, the most reliable means of protecting confidentiality is by virtue of an express confidentiality clause. Most standard employment contracts include an express clause, whether that be to keep your company's secrets, your clients' secrets, or both.
However, have you thought of the following?
- If an employer wrongfully repudiates the contract this might discharge the employee's obligation of confidence unless there is an express clause in his/her contract restraining his/her post-termination use or disclosure of genuine trade secrets.
- What about consultants, freelancers and other third parties (e.g. cleaners) providing services to your company? These are not usually employees of your company, and the level of implied protection acknowledged by the court is lower. Therefore the need for an express contractual obligation of confidentiality in their contract is greater. If properly drafted such a clause can offer the same protection as a similar clause in an employment contract.
- Standard confidentiality clauses seek to protect the secrets of your company and the confidentiality of your clients. However, what about personal and confidential information about you, which members of staff may obtain while working with you? This type of confidential information would have to be protected by a separate confidentiality clause between the individuals concerned.
- If you become aware that an employee has disclosed confidential information to the media or to a competitor, this is one of the circumstances where you can obtain an injunction to prevent the third party from using the information.
Although the law in this area is in a state of flux, undoubtedly the existence and wording of a confidentiality clause will assist the courts to help to protect your company's secrets.
For further information please contact Simon Jeffreys at e-mail: simon.jeffreys@cms-cmck.com or on +44 (0) 20 7367 3421 or Karen Marshall at e-mail: karen.marshall@cms-cmck.com or on +44 (0) 207 367 2522.
