Breach of confidentiality in employment

Confidentiality clauses within an employment contract

As confidential information is extremely important to employers it is common for a confidentiality clause to be contained in the employment contract. The purpose of the clause is to prevent an employee from using, copying, or disclosing confidential information, and if drafted correctly the clause will survive termination of an employee’s contract, and therefore be enforceable after employment has ended.

Recently, we have been receiving enquiries from employees whose former employers are threatening legal action in respect of breaches of the confidentiality clause in their contract.

It is important to remember that unless the documentation you are taking personally relates to you, the chances are you will not have a legitimate and legal basis for taking the confidential documentation.

We do not recommend that you take any confidential documentation from your employer during or at the end of your employment.  If you require any information, then it is advisable to 1) ask your employer if you can take it and tell them the reasons why, and/or 2) make a subject access request under your data protection rights in order to obtain the documentation.

What action can an employer take if you breach the confidentiality clause within your contract of employment?

Depending on the severity of the alleged breach, the employer or their legal representative may write to you setting out the allegations and the documentation it considers you have taken.

Within the correspondence they will invite you to confirm that you have taken the documentation and the reasons why. In addition, it is also likely that you will be requested to sign some undertakings which are likely to be attached to the correspondence.

The undertakings are essentially promises which you are giving to your former employer.

Whilst the undertakings will vary depending on the situation, it is likely that the employer will request the following:

1. Confirmation that the documentation within your possession is or has been or will be irretrievably deleted by a certain date and time.
2. Confirmation that you have not used the information.
3. Confirmation you have not disclosed the information to a third party.

If you fail to respond to the correspondence, then your former employer may commence legal proceedings either to obtain an injunction, to prevent you using the confidential information further or they may seek compensation for any loss they suffer as a result of the breach, and in serious cases they may issue proceedings for both.

In my experience injunctive proceedings are costly because everything needs to be done so quickly. However, this does not mean you should ignore correspondence which alleges you have breached the terms of the confidentiality clause within your employment contract.

The action the former employer takes will often depend on the severity of the breach and the seniority of the employee. For instance, an employer is likely to take swift and serious action against a former employee who held a senior role and has taken client information.

What should you do if your former employer alleges you have breached confidentiality?

If you receive correspondence alleging you have breached the terms of your employment contract, you should seek independent advice as soon as possible. The options available to you will depend on the following:

• Whether you have taken any confidential information; and
• If so, why the information was taken.

It is common for employees to take documentation which they consider will support their position in the event they pursue a claim in the Employment Tribunal. However, if matters proceed in the Employment Tribunal, then both parties are under a duty to disclose documentation which is relevant to the proceedings. This means the employer would have to disclose the documents, provided they are relevant. 

No matter the circumstances, I would not recommend you ignore correspondence from a former employer threatening proceedings nor do I advise you to sign the undertakings unless you have sought advice, as the implications of signing the undertakings and then breaching them could be significant.  As could ignoring the correspondence as your former employer may commence legal proceedings.

If you have any queries or have received similar correspondence, then please do not hesitate to contact myself or a member of the team on 01983 897003.