Can an employer require a worker to keep information relating to the employer confidential after the termination of employment?
Employment & Labour Law (3rd edition)
There is a specific statutory obligation to remain confidential (Law No. 24,766) for life (both during employment and after). The confidential duty extends to all the company’s business secrets, such as technical know-how, customer and supplier lists, prices, etc.
The worker is obliged to keep the information related to the employer confidential after the termination of employment, if such information falls into the scope of trade secrets as defined in the Anti-Unfair Competition Law of the PRC (utilized technical and business information which is unknown by the public; may create business interests or profit for its legal owners; and is maintained secrecy by its legal owners).
However, in practice, many employers choose to enter into a confidential agreement/clause with his employees, making clear the definition and scope of the company’s ‘trade secrets’ and the confidentiality duty of the employees to reduce the potential legal risks.
Yes, it is possible. Professional, industrial and business secrets are protected by law. It is highly recommended to explicitly determine in the labor agreement the confidential information that the employer wants to protect. The disclosure of confidential information carries civil and criminal responsibilities.
Confidentiality covenants are admitted under French law. Based on existing case law, the only potential matter for discussion relates to the necessity to limit the duty in time.
Yes, it is common understanding that it is part of the employees’ obligations not to disclose any confidential information even after termination of the employment. Covered by this obligation are trade and business secrets as well as confidential information which the employer has marked as confidential for the company’s interest.
Yes. However, such clauses are permitted and customary for individuals in key positions who handle confidential or sensitive information of the employer.
Yes, this is possible. Generally, this is set out in the employment agreement or company regulation.
Under Italian law, employers' confidential information is granted with a specific protection - which is effective also after the termination of the employment relationship - to the extent it qualifies as a "trade secret". This only happens when all the following requirements are met:
- the information is secret, as it is not widely known or easily accessible by experts who operates in the sector within which the information is relevant;
- it has an economic value to the extent it is secret;
- specific measures aimed at ensuring the secrecy of the information have been adopted by the employer.
There are no rules ensuring a consistent protection to employers' confidential information which does not qualify as a "trade secret", except for the general employees' obligation not to disclose proprietary information of the employer, which is effective over the employment relationship (however, the employer and the relevant employee may execute an agreement whereby it is agreed that such confidentiality obligations are effective also after the termination of the employment relationship).
Yes, there is a duty on employees not to disclose any confidential information belonging to an employer even after cessation of employment.
A confidentiality clause is commonly included in employment contracts to remind employees of their confidentiality obligations during and after cessation of employment.
An employer may include a post termination confidentiality clause in the employment contract or in a severance agreement.
According to the Norwegian Marketing Practices Act, an employee who has obtained knowledge of a trade secret in connection with his/her employment shall not exploit the secret unlawfully in the course of trade.
Confidentiality agreements between the employer and the employee pertaining to information obtained in the course of employment are valid and enforceable, and if entered into during the employment, remain enforceable even after the termination of employment in accordance with its terms.
Employers can and commonly do require a worker to keep information relating to the employer confidential after the termination of employment, through contractual agreement. In addition, in May 2016, former President Obama signed into law the Defend Trade Secrets Act (DTSA) providing companies, for the first time, a federal private action for misappropriation of trade secrets. Although there were already similar state remedies in place, given the uncertainty of protection from one state to another the DTSA significantly enhances protection of trade secrets across multiple jurisdictions. The enactment of the DTSA resulted in an escalation in litigation centered on alleged trade secret misappropriation, in particular in the technology industry. In addition, large jury awards in recent trade secret misappropriation cases have helped what was once an underused cause of action, become an effective tool for protecting trade secret information in the digital age.
The DTSA does not preempt state trade secret laws, and state courts and state law remain an option for victims of trade secret misappropriation. With its federal forum and federal remedy, the DTSA, will over time create a nationwide body of law and provide a degree of predictability for company litigants. Remedies under the DTSA include civil seizure, an injunction, and an award of monetary damages. The court may award damages (i) for actual loss caused by misappropriation of the trade secret, (ii) for any unjust enrichment caused by misappropriation of the trade secret, and (iii) for a reasonable royalty for the unauthorized disclosure or use of the trade secret.
Mattos: Yes. Confidentiality agreements are enforceable in Brazil.
If the employer has a legitimate interest, the employee is under the statutory duty of confidentiality even post-employment. Therefore, inter alia, the employer may require a worker to keep information relating to the employer confidential after the termination of employment, if it has justified business interests at stake.
An employer can require an employee to keep information related to the employer confidential after the termination of employment by:
- providing a non-disclosure agreement in an employment contract; or
- mutually making a non-disclosure agreement separately from an employment contract with an employee.
However, a non-disclosure agreement is subject to Unfair Contract Terms Act. A non-disclosure agreement may be deemed to be an unfair contract term if the court consider that such agreement causes excessive restriction of rights, freedom and burden to an employee (e.g. agreement with unlimited binding period). A non-disclosure agreement which is deemed to be an unfair contract term shall only be enforceable to the extent that they are fair and reasonable according to the circumstances.
According to Article 321a CO, as a general rule, an employee must not use or reveal any confidential information which they have gained knowledge of during and within the employment relationship, such as business secrets.
This duty of confidentiality remains effective even after the termination of employment, so long as it is necessary in order to preserve the employer's legitimate interests.
Additionally, the disclosure of confidential business information may also fall into the scope of the Swiss Criminal Code. In this context, an employee who reveals a manufacturing or trade secret in spite of a statutory or contractual duty of confidentiality is, upon complaint, potentially liable to a maximum three-year custodial sentence or to a monetary penalty.
Information relating to the employer’s business is protected by the Act on Trade Secrets. The Act defines a trade secret as information concerning the business or industrial relations of a person conducting business or industrial activities, which that person wants to keep secret and which the divulgation of is likely to cause damage as regards competition. An employee who wilfully or through negligence exploits reveals or acquire unauthorized access to an employer’s trade secret of which the employee has been informed during the course of the employment under such circumstances that the employee understood, or ought to have understood, that the employee was not allowed to exploit, reveal or acquire it, shall compensate the damage caused by the action. This only applies after the expiry of an employment if special reasons are at hand, e.g., if the former employee immediately starts working for a competitor and uses trade secrets belonging to the former employer in the new employment. An employee who has violated a trade secret may be prohibited by the courts, under penalty of a fine, to exploit or reveal the trade secret. The courts may also order that documents or objects that he or she has in possession and that contain the secret shall be surrendered to the person who has been subject of the unlawful violation.
Further, an employer may require the employee to enter in to an agreement of confidentiality. This may be included in the employment agreement as a provision or as a separate agreement.
Yes. Most written employment agreements contain a clause expressly setting out the obligations of an employee in respect of confidential information following termination.
In the absence of a contractual provision, an implied duty not to disclose confidential information survives the termination of an employment agreement, but in a restricted form. Information which is of a sufficiently high degree of confidentiality as to amount to a trade secret will be subject to an ongoing duty not to use or disclose the information.
The determination of what constitutes a trade secret is determined on a case-by-case basis having regard to the nature of the employment, the nature of the information, whether the employer impressed upon the employee the confidential nature of the information; and whether the relevant information is easily isolated from other information which the employee is free to use.
Very often clauses in the employment contract include such a contractual obligation for employees to keep information relating to the employer confidential (especially on clients or billing arrangements). Some employees are also bound by a legal secrecy obligation.
Yes. Trade secrets may be protected by law during and after employment. In addition, a detailed confidentiality obligation can be agreed in the employment contract with respect to information or data obtained during the course of the employment relationship. Any express confidentiality clause should detail the scope of the confidential information covered, as well as the relevant term which will usually be during and post-termination of employment (arguably even for an indefinite period of time).
Yes. Nevertheless, despite the fact that -as in the case of the previous answer- said agreement has not been regulated nor proscribed by law, in order to be considered as a valid obligation for the worker, it must be subject to the following:
- The confidentiality obligation must be in written document signed by the worker in sign of consent. It is common to include said obligation as a special clause in the employment agreement.
- Commercial or economic interest is accredited regarding the privacy and confidentiality of the information involved.
Yes. To avoid any doubt, employers should stipulate in their work rules, and ideally in a separate agreement with each employee, that the employees owe a confidentiality obligation not only during employment but also after the termination of employment. Also, employers are recommended to provide a clear definition of confidential information in the work rules or the agreement, in order to provide guidance to the employees and help uphold the enforceability of the confidentiality provision in case there is a breach.
Confidentiality clauses are also common in the Netherlands. The clause prohibits the employee exposing certain information about the company, the organisation and the internal and external contracts of the employer, unless the employer allows him or her to do so. Clauses that stay in force after the ending of the contract are in principle valid, unless a weighing of interests leads to the conclusion that the employee is unreasonably prejudiced.
Confidentiality clauses are not included in Dutch law (yet), so they are not bound to certain statutory requirements.
Not including a confidentiality clause in the employment contract does not mean that an employee is free to share ‘secrets’ of his (former) employer with third parties.
Confidentiality agreements can relate to certain confidential information (as agreed by the employer and the employee) gained by the employee during the course of employment. Such information may be broader than the information that would otherwise be protected under an implied term or in equity. Under Austrian law the protection of trade secrets and confidential information is, in principle, regulated by the Austrian Act against Unfair Competition, the Austrian Data Protection Act and the Austrian Criminal Code. Confidentiality clauses generally remain in force whilst the information protected remains confidential. This means that the clause may apply during employment and potentially long after the employment relationship ends.
The FLL provides that any waiver of employee’s rights is null. However, it is relatively common to find negotiations when terminating an employee, where the parties agree on an amount below the amount resulting from the mandatory severance. While an employee’s statement waiving his/her right to severance would be unenforceable, in practice, the parties will enter into a mutual agreement to terminate the employment, agreeing on a lump-sum amount that is not referred to as severance, but as an “extraordinary compensation” or “gratification”. Normally, the aforementioned concept is a portion of what would otherwise be full severance under the FLL.
The agreement reached between employer and employee, in order to be binding, must be personally ratified before the Conciliation and Arbitration Labour Board.
Yes, it is possible and legal to enter into a confidentiality agreement with an employee after termination of employment. The violation of this type of agreement may give rise to a claim for damages against the former employee or even a criminal action. It is important to establish in detail the information that will be considered confidential, as not everything may be regarded as confidential under Mexican law.
The law requires workers to keep an employer’s trade secrets confidential after the termination of employment. Employers can only require workers to maintain the confidentiality of other types of confidential information, after the termination of employment, by express contractual agreement. Most contracts of employment contain an express obligation to protect identified categories of confidential information after employment as only limited types of confidential information fall into the category of “trade secrets” and it can be difficult to identify these.
Yes, Ex-employeer can only restrict a worker to not open commercial or other non disclosen information to competitors: new employers or another third persons.
Yes, a post-termination non-disclosure agreement is enforceable in Korea. Employers should carefully define what constitutes “confidential information” in any non-disclosure provision. Also, unlike non-compete or non-solicitation, non-disclosure agreements or provisions may be set for an indefinite period because non-disclosure obligations are – as a general proposition – not seen as infringing upon an individual’s constitutional freedom of employment.
Confidential information is subject to confidentialy agreements between the employer and worker. Such information may be defined by law, other regulation, or an act of the employer.
The worker's obligation to keep information relating to the employer confidential may also be stipulated in the employment contract or a by a separate confidentiality agreement.
Disclosure and unauthorised obtainment of a business secret is a criminal offence for which a punishment by imprisonment not exceeding three years is prescribed.