By: Karina Pogosyan
Employers often worry (with good reason) about protecting their confidential information. After all, organizations typically derive business advantage by ensuring exclusive use of their confidential, proprietary information. If this information is not vigorously protected, employers risk losing their hard earned market advantage to competition.
Canadian common law recognizes this by imposing on all employees – past and present – an ongoing, implied duty of good faith and fidelity. This duty means employees must act honestly, faithfully and with a view of their employer’s best interests, including not to reveal their confidential information.
Importantly, an employee owes the duty of confidence to their employer:
- Regardless of whether there is a written employment contract dealing with confidentiality and non-disclosure;
- Regardless of whether the employee is a fiduciary;
- During employment; and
- After employment ends.
Although an employee’s duty of good faith and fidelity applies even when no written employment contract exists, employers are well advised to set out clear expectations about the proper use and permissible disclosure of any information the employee may come in contact with during employment. Doing so at the outset of the employment relationship will put the employee “on notice” about what information is considered “confidential” and their corresponding obligations. This will hopefully protect your organization from inadvertent, or even intentional, misuse of your confidential information.
Additionally, it is best practice to regularly review and update your employees’ contracts as an employee’s positions evolve and become more senior, which typically means a corresponding increase to their level of access to company’s more unique information, including its trade secrets. If you will be updating an existing employee’s contract with a new confidentiality or non-disclosure provision, ensure the new contract terms will be legally enforceable by giving additional consideration to the employee, as we discussed in our earlier article. Additional consideration to an existing employee may include a promotion, a one-time bonus, a pay raise, or some other form of mutual consideration.
It is important to remember, however, that an employee’s “know-how” – their skill, knowledge and experience acquired during employment is not considered confidential information. Thus, after their employment ends, as long as the employee is relying solely on their memory and is not using any of their former employer’s documents, they will be free to use the general knowledge and skills with future employers.
Contact a member of our SWL team for any questions and for help drafting or reviewing your employee contracts to help protect your organization’s most valuable asset, your confidential information, today!
