imposes various duties on an employee
to his/her employer. This includes a duty
of fidelity and good faith to the employer;
that implies a duty of confidentiality.
The implied duty means that, during the
course of employment, employees must
not disclose Confidential Information or
Trade Secrets to third parties, or use the
Confidential Information for their own
(or a third party’s) purpose. After the
employment has ended, the implied duty
of confidentiality only applies to Trade
Secrets.
It is important to remember that the
contract is king. Although an employer
has the benefit of some protection
at law, the best practice is to have
appropriately drafted confidentiality
clauses in employment contracts.
Along with other practical steps (see
box), this should provide the business
with the best prospect of protecting its
confidential information. For example,
the present position at law suggests
that commercial information would
be protectable after employment
as Confidential Information if the
information belongs to the employer,
the employer imposed an express duty
of confidence post-termination, that
obligation has been breached and
there has been loss or damage to the
employer. That said, just saying that
information is confidential will not in and
of itself mean it is protectable. The court
would still examine that issue as part of
any claim.
But what if an employee/former
employee is threatening to, or has,
disclosed or used confidential information
without permission? Employers are
advised to act quickly to obtain evidence
and take appropriate steps to protect the
Confidential Information/Trade Secret.
Whether or not the information has
been disclosed or misused, it may be
possible to immediately apply to the
court for an interim injunction. This
is an order from the court restraining
the other party from carrying out the
threatened disclosure or misuse or
any further disclosures or use before
the trial. If the information has been
misused, the employer may be able to
obtain a so-called springboard injunction.
A springboard injunction seeks to strip
LEGALLY SPEAKING
PRACTICAL STEPS TO MITIGATE THE RISK OF A SECURITY BREACH
The protection of confidential information requires a holistic process, from implementing
appropriate protections, to following the implemented policies and procedures, to taking
appropriate enforcement steps. Practical steps to protect confidential information are listed below.
1. Implementing effective confidentiality clauses in employment contracts. There are grey areas
between the four categories of information, and the express terms of a contract would be a factor
taken into account by a court when assessing categorisation
2. Implementing a confidentiality policy to support the clauses within the contracts. This, together
with training, can improve employees’ knowledge of the employer’s expectations, and reduce the
risk of unauthorised disclosures and use
3. Marking commercially-sensitive information as ‘confidential’
4. Restricting access to commercially sensitive information to those who need access
5. Implementing (where practical) technical security measures to protect commercially sensitive
information
6. Reminding employees of their post-termination confidentiality obligations during an exit interview
at the end of their employment
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the wrongdoer of the unfair competitive
advantage gained from the misuse by
restraining the wrongdoer’s activity for a
period of time, to reflect the head-start
gained by the misuse.
Alternatively, the individual may be put
on notice of the claim, and the employer
could request an undertaking that the
individual will not (or will not continue
to) disclose or use the confidential
information. If satisfactory undertakings
are not received, the employer may
issue proceedings, seeking injunctive
relief and/or damages. An employer
who succeeds with a claim for breach
of confidence may be entitled to various
benefits. They might include:
● An injunction. A final order from the
court restraining the other party from
carrying out any further disclosure or
misuse of the information; and/or
● Damages: the employer would be
entitled to recover damages to reflect
the loss caused by the disclosure and/or
misuse; or
● Account of profits: the employer would
be entitled to the gains made by the
wrongdoer.
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