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To stop former employees using confidential information, you should meet four crucial requirements:
- you will have to identify with specificity (and not merely in global terms) what you allege to be confidential;
- you must show that the confidential information is truly confidential (and not, for example, public knowledge);
- you must show that a former employee received the confidential information in circumstances that made it clear that the information was confidential; and
- you will need to show that there is an actual or threatened misuse of the information.
The last requirement is usually not difficult to establish!
To protect confidential information you need to readily identify exactly what you allege to be confidential and why. The more general the information, the less likely it is that a court would prevent a former employee using that information.
If information comes about as a result of very little effort and is relatively mundane, it may not be possible, at law, to protect that information. If information is widely known (albeit perhaps not in the true sense -- public) it would be difficult to protect that information from a former employee’s use. If a person could duplicate information with comparatively little effort, the information may not be protectable. If no steps are taken to protect information during the period of employment or afterwards, the company cannot later complain about the misuse of that information.
The way your industry competitors deal with and protect confidential information may also be relevant to your own obligations in dealing with and protecting your information.
It should be standard procedure for businesses to put a written confidential agreement into effect for new employees likely to become privy to confidential information belonging to the company or which may be created as confidential information in the course of their employment. The agreement needs to provide a specific regime as to how that confidential information is dealt with after the termination of employment.
Businesses should also have a protocol for identifying information as confidential as soon as it is created and informing employees with access to information that it is confidential and should be treated in accordance with company policy. It will be important for businesses to identify only information that is truly confidential. Labelling everything with a "confidential" stamp will, in fact, have the opposite result -- the term "confidential" will become meaningless.
If you would like to find out more about confidentiality issues, please telephone Alan of our office today.
Please note that the advice in this communication is general advice only and you should not rely on this advice unless you obtain legal advice specific to your own requirements.
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