Written by Nick Hine, Partner and Zahra Mahmood, Solicitor at Employment Law Specialist Constantine Law

Confidential information is the crown jewels for a business, which if it fall into the wrong hands, can cause considerable damage to the company, and may give an advantage to a competitor. This is why careful consideration should be given to protecting  confidential information in any post termination restrictions.

Protection during employment

It is important that employers are aware that in the absence of an express confidentiality requirement during the employment relationship, there will only be an implied duty that employees will conduct themselves with fidelity and good faith. This requires the employee to:

(1) act honestly towards the employer,

(2) to disclose to the employer all information relevant to its business,

(3) not to make secret profits from the employer’s business,

(4) to respect the confidentiality of the employer’s commercial and business information, and

(5) not to compete with the employer’s business.

However, it would be unwise for an employer to rely solely on implied terms and as such, contracts should contain express confidentiality provisions which identify what information the business considers confidential to avoid a dispute later on.

Protection after employment

In the absence of an express confidentiality requirement after the employment relationship has ended, only trade secrets can be protected by means of the implied duty. Examples include, secret processes of manufacture, designs or special methods of construction; and other information which is of a sufficiently high degree of confidentiality as to amount to a trade secret. Again, it would be unwise for an employer to rely on an implied term and express obligations should always be included as it will draw the employee’s attention as to what the company considered confidential, and it will also help the court make a decision as to what information is properly a trade secret.

Defining confidential information

It is important that employment contracts contain a specific and detailed definition for confidential information. Simply defining information as “confidential” will not, be enough to make it protectable. Consideration should be given to the provenance and purpose of the information, and the damage it could do if it were disclosed without authorisation.

Practical steps to protect confidential information

Employers should always take other (more practical) steps to protect their confidential information to impress upon the employee that the information is considered confidential. Some steps include;

(1) sharing key information to only limited numbers of employees,

(2) operate security measures, monitoring the use of emails (both during and after the employment – an employee is most likely to take confidential information just before he/she leaves), photocopiers, other devices and password protect certain electronic documents,

(3) in the event the employee works from home, expressly state that it is a requirement that documents must be kept in a locked cupboard or filing cabinet,

(4) expressly state that employees should not be sending emails to personal email addresses, and

(5) ensure there are proper reporting procedures.

When an employee’s employment termination (for whatever reason) it should be standard practice to issue an employee with a leaver’s letter reminding the employee that they are bound by certain obligations which apply after employment such as a duty of confidentiality, reminding the employee of any post termination restrictions and asking the employee to return company property.


In the event an employee breaches their obligations of confidentially, an employer will need to consider the most appropriate protection to seek. There are a number of options available and will need to be considered on a case-by-case basis. In summary, some options include (1) asking the former employee (and any third party such as a new employer) to enter into contractual undertakings to the former-employer that they will not use its confidential information, (2) issue a claim and seek an injunction to restrain the former employee from doing (or continuing to do) a particular act, and (3) seeking damages where the former employer has suffered financial loss as a result of the employee’s breach(es) of contract or seek an account of profits.


Image: Nick Hine.


Nick Hine has specialised in employment law for nearly 30 years and ran his own employment law boutique for ten years. He advises small to large businesses on all aspects of contentious and non-contentious employment law issues