What is confidential information?
“Confidential information” can range from contacts, suppliers and customer lists all the way up to “trade secrets” such as recipes or formulas. Such information can be held in any number of different formats from paper to IT systems.
Legally, confidential information consists of two different categories:
- Trade Secrets – these are specific pieces of information that if disclosed would seriously or irrevocably damage the business of a company. They are treated as being of the upmost importance to how a business operates. A good example of this would be the secret formula for Coca Cola. Trade Secrets receive protection even after employment terminates regardless of whether the employee has signed a confidentially agreement.
- Confidential Information – sometimes known as ‘mere confidential information’. This is information important to a business but which cannot be considered a trade secret. A customer list would be a good example of this.
Can we help?
If you are an employer concerned about how to protect your confidential information, take a look at our employment contracts page or give us a call on 0114 249 59 69
If you are an employee and you need advice about contractual restrictions or alleged breach of contract, please give us a call.
How do you protect confidential information?
Most organisations have some confidential information and normally it is necessary to share it with employees to enable them to do their jobs. And therein lies the challenge. How do you share it without putting it at risk?
This area of law is known as ‘confidentiality’. Businesses can do a lot to stop employees breaching confidentiality, using the information for their own purposes, or giving out their information to rival companies or the general public. Unfortunately, many organisations fail to take the right precautions – particularly small businesses.
Generally speaking it is possible to lawfully protect confidential information from being wrongfully disclosed or misused.
The implied duty of confidentiality…
All employees have a duty of confidentiality whilst they are employed. This duty is implied into a contract of employment by law and so does not need to be expressly written down. This implied duty protects both “mere” confidential information and trade secrets.
…after employment has ended
However, after employment has ended, only trade secrets are protected by the implied duty of confidentiality. In other words, your confidential information (e.g. customer lists) are not protected unless you have a written confidentiality clause.
Confidentiality clauses in contracts
If you are interested in having contracts of employment drafted, please take a look at our employment contracts page.
What information cannot be protected?
Own skill or know how
In order for information to be protectable the information should not be the employee’s own “skill or know how”. Information that is solely in relation to the employee’s own skill is their property and cannot be restricted by a confidentiality clause.
Information that is already in the public domain has no element of confidentiality and its disclosure cannot be restricted by a company.
Public Interest Disclosures
Employers cannot lawfully restrict ‘whistleblowing’ statements from being made to regulatory bodies or the media is they disclose confidential information which in the public interest. See Whistleblowing for more information on this.