In our previous article, we discussed the possibility of concluding a non-compete agreement with an employee during and after the employment relationship ends. In this article, we will explore the issue of maintaining confidentiality within an ongoing employment relationship.
Confidentiality Agreement
A confidentiality agreement protects business secrets, which means information in respect of which the person entitled to use or dispose of the information has taken, with due diligence, steps to keep it confidential.
In a confidentiality agreement, it is crucial to precisely define the information to be protected under the agreement. This agreement constitutes the formal premise required by law for the information to be recognized as a trade secret and subject to legal protection.
Form of concluding a confidentiality agreement
Upon entering into an employment contract, an employee is obligated to maintain confidentiality. It is in the employer's best interest to clarify all matters related to trade secrets so that the employee knows exactly what data constitutes particularly valuable information. While regulations do not require the employer to conclude a separate agreement, to protect the company's interests, it is advisable to specify the type (scope) of information that should not be disclosed, for example in the work regulations or the employment contract itself.
Sanctions for failure to maintain trade secrets
Labor law doctrine indicates that, as a general rule, it is not permissible to stipulate a contractual penalty in a confidentiality agreement concluded with an employee in the event of its breach during the employment relationship. This position was presented, among others, by the Ministry of Labor and Social Policy in its guidelines of April 7, 2015.
According to the above position, an employee is obligated to maintain confidentiality as defined in separate regulations. An employee is obligated to protect the employer's interests, protect its property, and maintain the confidentiality of information whose disclosure could be detrimental to the employer. It is generally accepted that maintaining the confidentiality of information whose disclosure could be detrimental to the employer is a special form of care for the employer's interests.
In the event of failure to maintain business secrets, an employee who, due to non-performance or improper performance of his or her duties, caused damage to the employer through his or her fault, shall be financially liable in accordance with the principles set out in the Labour Code.
It should be emphasized that the application of a contractual penalty in this case should be considered inconsistent with the principles of labor law. Pursuant to Article 115 of the Labor Code, an employee is liable for damages up to the actual loss suffered by the employer and only for the normal consequences of the act or omission that resulted in the damage. However, the institution of a contractual penalty significantly tightens the scope of the employee's financial liability, primarily relieving the employer of the obligation to prove the extent of the damage caused by the employee (or former employee), which is undoubtedly inconsistent with the principles of labor law.
This article is for informational purposes only and does not constitute legal advice.
Legal status as of May 31, 2024
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