Protecting confidential information

In this information age, protecting business secrets is vital but ever more difficult, as technology allows ex-employees to leave with reams of data. A few key steps can ensure that you can control your confidential information.

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Don’t employees have to keep the employer’s information secret anyway?

During employment, employees owe certain obligations not to use or disclose trade secrets. However, it is not legally clear that this duty applies to lesser types of confidential information.

After employment ends, employees are not automatically forbidden from using or disclosing trade secrets or confidential information.

How can employers protect their information?

It is always recommended that employers put in place clear employment contract clauses clarifying that employees must not use or disclose trade secrets or other types of confidential information. The clauses should also state that this obligation continues even after employment ends and specify the information that is regarded by the employer as confidential.

However, confidential information breaches can be hard to police so also consider reducing the opportunity for misuse by restricting employees’ activities after employment using post-employment restrictions. See our Quick Guide about using For more information about using post-employment restrictions to protect confidential information. 

Other practical measures

Practical steps to protect information not only reduce risk but improve your prospects of enforcing protective clauses in court, if necessary.

You should clearly label confidential information as such; restrict access to confidential information and circulate only as needed; secure physical and electronic documents by using locked cabinets, offices, password protection and encryption. When dealing with third parties, consider using a Non-disclosure agreement which can act one way or both ways. You can also use a Letter of confidentiality.

Stop employees from storing contacts and any business information on external sites such as LinkedIn, which makes information harder to protect.

Don’t breach an employee’s employment contract (eg by making a PILON without the contractual right to do so), as this can remove your right to enforce the contract.  

Act fast if you discover an ex-employee has breached confidential information restrictions (or another post-employment restriction), as delaying may mean you lose the right to an 'injunction', which is a court order preventing further breaches.

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