Keep trade secrets hush-hush
Individual employment and collective agreements can provide a range of protections for employers once their employees have left their employment.
These might include restraints on soliciting clients or other employees, or working for the competition for a period in a geographical area near the old employer.
Those types of protections will only apply if they are specifically included in the agreement.
They will be strictly applied so must be very carefully worded.
However, the intellectual property and confidential information of an employer will continue to be protected after employment ends even if there is no clause protecting such information in a written agreement.
The duty to keep information confidential continues after the employment agreement ceases.
Present and former employees are prevented by law from disclosing, without authorisation, trade secrets and other similar highly confidential information.
The nature of the information must be such that if disclosed, the information would cause significant harm to the employer’s business.
The information must not already have been made public - by someone
LEGAL MATTERS other than the employee - and the employer must have limited the distribution of the information in some way.
Knowledge of customers, budgets, pricing, and markets are some examples of information which may be protected in some circumstances.
When determining whether information meets the high threshold for protection, courts will look at the nature of the information, the nature of the employment, the employee’s role and the employee’s knowledge of the nature of the information.
You can take away much of this uncertainty by drafting clauses in the employment agreement to specify what you want to protect.
Employees can face criminal charges if they are found to have knowingly taken or copied trade secrets for their monetary benefit, or to cause the employer loss.
Taking the employer’s mation is theft.
In one case, several employees took customer lists and other confidential information and used it to set infor- up a competing business.
The penalties imposed were over a million dollars and the new business was also prevented from using the stolen information.
The courts can also issue orders to seize and examine computers and other records to see what information belonging to the employer is on the device or held, and when it was copied or accessed.
Forensic examination can discover what was on the device even after it has apparently been deleted and overwritten.
If you are unsure whether information you have would be considered confidential it is best to seek legal advice.
If you wish to protect your information from disclosure and be clear about what is protected you should include intellectual property and confidential information clauses in your employment agreements.
For more information on drafting employment agreements, see the Your Resources section of the Rainey Collins website.
Column courtesy of RAINEY COLLINS LAWYERS phone 0800 733 484, www.raineycollins.co.nz. If you have a legal inquiry you would like discussed in this column please email Alan on firstname.lastname@example.org