We recently emphasised the importance of appropriate contractual restraint provisions. Confidentiality provisions are just as important. Both have a deterrent as well as a remedial role. Both should be drawn to a new employee’s attention when given a contract of employment and on their leaving the employment. Practically, employers should carefully manage and monitor:
- client relationships so that no one person has sole contact or relationship responsibility for a client;
- the types of confidential information that are coming into employees’ hands during their employment. This may include client lists, information about client needs, pricing and marketing strategies, secret processes and specialist “know how”.
When an employee resigns or their employment is terminated, consider the implications for your business:
- What is the risk if the employee serves out their notice period?
- Is it possible the employee could sabotage the employer’s systems and databases?
- How likely are they to copy confidential documents or download confidential information?
- Should the employee be placed on “gardening leave” pending the end of their employment?
- Should the employee’s access to databases and emails be suspended or monitored during their notice period?
- Should an audit of the employee’s computer/phone records be conducted to ensure there has been no breach of obligation by the employee?
- Consider asking the employee to confirm in writing that they do not hold any documents of a confidential nature and have not downloaded or copied any confidential information.
- Remind an outgoing employee of their ongoing obligations of confidentality notwithstanding the end of their employment.
In a worst case scenario, employers may be able to take legal action based on breach of contractual confidential information requirements. A well worded contractual provision can be of assistance. However, keep in mind that, once the information has gone, it can be difficult and expensive to remedy the situation. Time spent on minimising the risk of the problem arising in the first place is time well spent. Please contact us if you would like assistance.