Can I protect my business from employees misusing confidential information?

One of the biggest risks for Jersey businesses is an employee leaving your business, choosing to work for a competitor and taking with them confidential information.

As a business owner or director you do need to consider how to protect confidential information and ensure that this does not disappear at the same time the employee does. It is fair to say that the misuse of confidential documents and or processes to a competitor could impact upon your business and unfortunately is somewhat prevalent.

How do I protect ‘confidential information’?

First and foremost, you need to clarify as part of your business review what information is considered confidential and what is not. Keep your confidential information separate from the non-confidential information to avoid any confusions.

Secondly, if you need to share or disclose confidential information with an employee, inform the employee in writing that the subject matter and the documents and or information provided is confidential. Keep an audit trail.

Thirdly, while all of the above will assist, the most effective way to ensure your confidential information is not misused is to restrict access. While stating the obvious the more people are aware of such information the more likely it is that this information will be misused.

If it is not possible to restrict access to ‘confidential information’ what other protection is available?

There are certain terms that are implied into every contract of employment (these are called implied terms). One of these implied terms is the duty of confidentiality, however this is not a very wide duty and does not generally include the period after termination. Relying on an implied term is unlikely to adequately protect confidential information.

In Jersey, employers incorporate express terms into employment contracts to protect their business interests. These are commonly referred to as restrictive covenants. If you hold confidential information which is paramount to your business operations, you should contain restrictive covenant clauses in the employee’s contract.

A typical restrictive covenant in a contract will prevent an employee from competing with your business for a certain period after the employee has left, or prevent the ex-employee from approaching or dealing with your customers by using knowledge of those customers gained during previous employment.