At the time of accepting an offer of employment, most employers will issue an employee with an employment contract. An employment contract typically prescribes an employee’s:
- Expectations and targets;
- Management hierarchy;
- Rights and obligations under the law;
- Remuneration package including other entitlements (eg bonuses or commissions);
- Grounds for summary termination;
- Notice periods for termination;
- Severance payments;
- Restraints of trade; and
- Confidentiality clauses.
Disputes may arise in relation to any one of the aforementioned provisions, however, one of the most common disputes arises from the contravention of the confidentiality clauses.
A confidentiality clause seeks to restrict the release or use of confidential information obtained during the course of employment. Such restraint will apply during employment and upon the termination of the employment relationship.
Employers from various industries and sectors will define confidential information differently. It will often include:
- Names of clients;
- Names of suppliers;
- Personal information of other employees;
- Marketing strategies;
- Structuring of the business;
- Proposed acquisitions or mergers;
- Product innovation;
- Financial data.
The purpose of a confidentiality clause is to prevent an employee from being able to utilise this information for their benefit, and against the interests of the employer.
As distinct from the contractual obligation to protect an employer’s confidential information, there is also an implied duty that an employee will not conduct themselves in a manner which is adverse to the interests of their employer.
Disputes often arise if there has been an actual or alleged breach of confidentiality. This may have arisen from an employee contacting a client asking that they terminate their dealings with the employer, saving confidential information onto a storage device to assist in establishing a rival business and providing information about the products to be brought to the market to competitors. Each of these situations could result in the employer experiencing financial loss, however, other types of loss may arise including a loss of market share or reputation.
If you are embroiled in an employment dispute arising from the use of confidential information, we recommend you contact our office and arrange an appointment to see one of our Privacy & Confidentiality Law Solicitors in our Sydney office. By appointment, we can also arrange a time for you to see one of our lawyers at a branch office. For a complete listing please see our "Locations" tab.
This webpage (and any material or wording appearing on this webpage) is provided for general information purposes only and does not constitute any Legal Advice. It does not take into account your objectives, your instructions or all of the relevant facts and/or circumstances. Navado accepts no responsibility to any person who relies on the information provided on this website. We further refer you to our Disclaimer.
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