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Breach of Confidence, Confidentiality Agreement

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Disclosure of Confidential Information and employer’s protection

Employment contract – confidentiality agreement

In every contract of employment, a term restricting the use or disclosure of confidential information can be implied. There quite often will also be a written term in an employment contract or confidentiality agreement setting out such obligations. The protection of intellectual property rights and confidential information for a business can be a serious issue that needs serious focus to protect the business. Urgent steps should be taken if there is a breach or threatened breach of confidentiality to safeguard the interests and assets of the business.

Confidential information can be contractual rights that appear in employment contracts and can intersect with an equitable obligation of confidence. The contractual rights operate to in addition to any express or implied contractual term revolving around the use of confidential information.

Whereas contractual rights are available as between employers and employees, the benefit of the equitable obligation of confidence has an advantage that it is not limited to parties that have a contractual relationship.

What is the scope of the restriction on the use of confidential information?

Different standards affect the restriction on the use of confidential information depending on whether it is during the existence of the employment contract or after the employment contract has come to an end.

During the employment contract

An employee owes a duty of good faith to their employer. There is an obligation not to use or disclose confidential information that is incorporated in that duty.  The disclosure of confidential information by an employee could also amount to a breach of a fiduciary duty that the employee owes to the employer. 

After the employment contract has come to an end

After an employment contract has ended, a far more limited class of confidential information is protected from use or disclosure by a former employee. That is generally because employees should not be stopped from using their experience and know-how in their next position.

As long as an employee does not take a copy or deliberately memorize confidential information, which may include lists of customers and suppliers, an employer may not be able to stop the employee from using that acquired skill and knowledge after the employment contract comes to an end.

Classes of confidential information to consider

Courts have considered there are 3 types of confidential information that should be considered in post-employment contract situations and they include:

1. information which, because of its trivial character or its easy accessibility from public sources of information, cannot be regarded by reasonable persons or by the law as confidential at all;
2. information which the employee must treat as confidential, either because the employee has expressly told it is confidential, or because from its character it obviously is so, but which once learned necessarily remains in the employee’s head and becomes part of their own skill and knowledge applied in the course of the employer’s business; and
3. specific trade secrets so confidential that, even though they may necessarily have been learned by heart and even though the employee may have left the service, they cannot lawfully be used for anyone’s benefit but the employer.

What is protected after the end of the employment contract is limited to stop the disclosure of trade secrets or other equally confidential information.

To determine whether information is sufficiently confidential to be protected after the employment contract comes to an end, depends on a number of matters. Some of the factors that are considered include the following:

1. what effort has the employer put in to get the information;
2. was the information held out and made known that it considered the information as confidential;
3. does the relevant industry consider that type of information to be confidential;
4. has the information been protected from disclosure by the employer; and
5. consider the particular employment itself and the nature of it.

Actions for breach of confidence

An employer must be able to show the following to be able to successfully pursue a claim for breach of confidence:

1. there is an obligation of confidence relating to the particular confidential information;
2. the information is by its nature, confidential;
3. there was no authorisation to disclose the information; and
4. the breach has caused the employer or business damage.

Aitken Whyte Lawyers – Brisbane Solicitors

Aitken Whyte Lawyers can assist you in clarifying the terms of employment by drafting appropriate employment or other contractual documents. We will write your agreements or employment contracts so that the terms between the parties are clearly set out and to minimise the risk of there being a dispute about what they mean.

If you are already in a dispute, a threat is apparent to your rights, need to know what your rights are or urgently need to protect valuable intellectual property rights, Aitken Whyte Lawyers will provide you with commercial and practical advice and aggressive but fair representation to protect and pursue your valuable rights and interests. We are focused on results, have significant experience in fighting litigation in all courts and offer services second to none. 

When disputes arise, Aitken Whyte Lawyers can assist in providing advice and advocating for a business, employer or employee during any dispute such as a dispute on the disclosure of confidential information.

Aitken Whyte Lawyers can assist you with any disputes relating to Confidential Information.  

While our offices are open at regular times, we are also available to talk to you after hours and around the clock and available to meet with you at convenient times as required.

Office Location and Contact Details

Brisbane

Aitken Whyte Lawyers Brisbane
2/414 Upper Roma Street
Brisbane QLD 4000

Ph: 07 3229 4459
Fax: +617 3211 9311
E: enquiries@awbrisbanelawyers.com.au