21st June 2021

Protecting your business – confidential information

Article by Linda Wilson | Employment, Legal Updates

Through this series of articles, ‘Protecting your business’, our Employment Partner, Linda Wilson, takes a look at different topics, providing tips and advice to help businesses. This article focusses on confidential information.

Your company may have identified that certain confidential information is key to the success of the business, whether that be trade secrets, client lists or algorithms. How can you protect that information and therefore your business?

‘There are a number of practical steps a business can take,’ says Linda Wilson, Partner and Head of the Employment Department at MacDonald Oates Solicitors. ‘A good starting point is to review the kind of information you are wanting to protect and to consider the different tools you have available to you to protect that information.’

The law

The law can provide some protection under:

  • Intellectual Property rights
  • the common law of confidentiality
  • by statute, such as the Trade Secrets Regulations

Depending on the type of confidential information you are trying to protect, the law may give some protection but particular areas, such as common law, are tricky and costly when it comes to enforcement. This is why most businesses have contracts and policies in place. These can bolster any protection the law may give and also provide contractual protection that can then be enforced directly as a breach of contract.

Contracts, policies and procedures

  • Ensure your employment contracts contain bespoke confidentiality clauses which are tailored to the information which is most important to your business.
  • Consider whether you should introduce restrictive covenants preventing employees from soliciting or dealing with clients for a period after their employment terminates. This is because it can be difficult to identify and prove when confidential information is being used unlawfully.
  • Ensure you have garden leave provision in the contracts.
  • Make it a requirement of the employment contract that on departure staff return and delete all company property and information.
  • Ensure policies regarding the use of confidential information are clear and accessible.
  • Which staff have access to your valuable information? Do they need to? Consider this and how your IT system could control access.
  • Where possible, keep a record of who has control of and access to sensitive commercial information.
  • Label documents with ‘confidential’ and ‘not for external disclosure’ where appropriate.
  • Provide training to employees about their confidentiality obligations and how they apply in a remote-working scenario.

IT systems

Get IT savvy – know your IT systems and software, even if at a basic level, and engage with suppliers and providers that may be able to assist with this.

  • What are the limits to its protections?
  • Ensure encryption and other restrictions are in place.
  • Use software to alert you to large downloads, an increase in emails to personal accounts or voluminous printing.
  • Ensure that you have appropriately drafted privacy notices for staff so you are practically and legally able to monitor use of your IT systems.

Your people

Last and by no means least – your staff. It is worth highlighting that protecting your business starts from the recruitment stage and it is not just about getting the contracts right.

Recruiting the right staff that fit with your business culture, and therefore respect and protect the business they work in, is crucial. How are you going to retain your staff and what may cause them to be more of a flight risk?

The pandemic has also brought more challenges with staff working from home. It is therefore worth considering the following:

  • Reduced staff loyalty – have staff felt supported or abandoned over the past year?
  • Accountability – how are staff being managed and monitored?
  • Flight risks – identify any staff that may be considering leaving and/or would cause damage to the business if they left, and attempt to mitigate that risk.
  • Departing employees – manage the risk.
    • For employees who have given notice of resignation, consider garden leave so their implied and express contractual duties continue and you can restrict their access to the confidential information.
    • Reiterate the employee’s confidentiality obligations on termination of employment.
    • Ask departing employees to confirm in writing that they have returned all company property and information.

If you would like further advice on this topic and how best to protect your confidential information, please get in touch.

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.