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Employment Law Services Ltd

Confidential Information

The law on confidentiality of information applies differently to an individual during and then after employment. The duty to keep information confidential during the period of employment falls within the general implied duty of good faith. This relates to any information which the employee has been told is confidential, or is obviously so from its nature. While the individual remains employed by the particular employer, that employer’s information cannot be used for, or disclosed to, anyone other than for the employer’s business. Clearly while the individual is an employee any breach of confidentiality can justify disciplinary sanctions even, is serious, dismissal.

The situation changes Radically after the employment has ended. Without any express written agreement to the contrary (see link to PAYG contract) the courts will only prevent an ex-employee from disclosing or using information that falls within the definition of being a “trade secret” (see below), or if it is of such a highly confidential nature as to require the same level of protection as a trade secret. Whether or not a particular piece of information is a trade secret has to be judged in light of the employer’s actual business, and the practise of the employer’s particular trade or, profession or industry. The court of Appeal has described a trade secret” as; “information used in a trade or business which, if disclosed to a competitor, would e liable to cause real or significant damage to the owner of the secret. In addition. The owner must limit the dissemination of it, or at least not encourage or permit widespread publication”.

It would not be able to gain or expect protection on information by simply describing it as a “trade secret”, the court is prepared to scrutinise the facts of a case to determine if a piece of information is or is not a true “trade secret”.

Court cases have indicated there are three classes of information. At one end there are trade secrets. At the opposite end are the general skills and knowledge which the ex-employee is able to take to the next employment without restriction. The majority of disputes in the courts are over the middle ground between the two more clearly identifiable categories. This middle ground is capable of protection if it is clearly listed and defined in an express written agreement. However, this information cannot be kept secret forever. The confidential nature of this information will reduce over time. Therefore if an employer wants to prevent misuse of its information it will need to clearly identify the confidential information and ensure that it is carefully restricted, so that it has the best chance of being enforceable. (see PAYG contract of employment).

 

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