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Confidentiality agreement with the employee

In the course of their work, employees often have access to information that the employer considers confidential or even its trade secrets. They therefore protect it from disclosure. How can this protection be achieved? This is the focus of our text.

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Therefore, it is advisable to treat the confidentiality of such information in a confidentiality agreement between the employer and the employee, as disclosure of such information could undermine the employer’s interests or even cause significant damage to the employer.

Is it necessary to conclude a confidentiality agreement?

In general, the obligation of confidentiality of facts which come to the employee’s knowledge in the course of his or her work applies only to employees in the public sector. Typically, this includes civil servants, police officers, employees of municipal or regional authorities and so on. However, if a private employer wishes to bind its employee to confidentiality, then it must enter into a contract or confidentiality agreement with the employee. The employer cannot unilaterally impose a confidentiality obligation on its employees merely by means of an internal regulation, and it would not be possible to impose any penalties on the employee in the event of a breach of such an internal regulation. The employer could only specify the already agreed confidentiality obligation by means of an internal regulation, but not unilaterally establish it. The confidentiality agreement itself may be contained in the employment contract or a separate confidentiality agreement may be concluded. The latter would deal only with issues related to the employee’s obligation to maintain confidentiality of precisely defined information.

What the confidentiality agreement should contain

First of all, the confidentiality agreement should contain a definition of the information to be protected and kept confidential, or which must not be disclosed by the employee to a third party. This will include, for example, the employer’s trade secrets, know-how, pricing policy or other information that is not publicly available and in whose confidentiality the employer has a legitimate interest. Conversely, an overly general specification covering all information that the employee learns in the course of his or her employment could be considered too vague and unenforceable. It is also appropriate to define in the agreement the cases in which the employee will not be bound by the obligation of confidentiality, in particular in cases where the information is publicly available or where the employee will be obliged to disclose such information upon a court order. It is therefore not recommended to use the free downloadable templates for confidentiality agreements as they can never contain a precise definition of the important topics that should be included in the agreement. By using a template confidentiality agreement, you run the risk that it could be invalid or not provide sufficient protection for all the information you want to protect in your business.

Non-disclosure agreement (NDA)

We will create a confidentiality agreement for you, or review an existing NDA. With us, you can be sure that your trade secrets and know-how will remain safe. We routinely handle everything within two days, always at a predetermined price.

Production processes that competitors are interested in, client addresses, secret recipes. You may have many reasons to want to protect your business. The risk is usually not posed by industrial spies, but by your own employees… if they defect to a competitor. What protection does the competition clause offer in this respect? And what are the rules for its use? That’s what we look at in our article.

Employee responsibility

What consequences can an employee suffer if he or she breaches the duty of confidentiality? Primarily, the employee will be obliged to compensate the employer for the damage caused by the breach of this obligation. This may include, but is not limited to, lost profits. However, it should be noted that it may be quite difficult to quantify the amount of the damage. Breach of the employee’s duty of confidentiality may also be grounds for dismissal by the employer. Here, however, it will be necessary to assess the significance of the facts disclosed, the position of the employee and the circle of persons to whom the information was disclosed, and possibly other relevant circumstances, in order to determine whether it is possible to proceed directly to termination. However, in the event of a breach of confidentiality by an employee, it is not possible to negotiate a contractual penalty, which is generally prohibited by the Labour Code. Therefore, no fines or financial penalties can be imposed on an employee for breach of confidentiality.

Confidentiality agreement after termination of employment

An employee’s obligation to maintain confidentiality of certain facts may apply both during the employment relationship and after its termination. Here, it will depend solely on the agreement between the employer and the employee as to the duration of the post-employment confidentiality obligation. Even in the event of a breach of the post-employment confidentiality obligation, the former employee will be liable for the damage he or she caused to the employer by disclosing the information.

If you want to draw up or review a confidentiality agreement, of course in accordance with the New Civil Code (NCL), please get acquainted with our offer.

The competition clause is far from being only related to the relationship between the employee and the employer. In general, it is any obligation that restricts the competitive activities of one party to the benefit of the other. For example, you can insure your relationship with a sole trader or certain members of the company’s management. What rules and regulations govern competition clauses in commercial relationships? This is the focus of our article.

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Non-disclosure agreement (NDA)

We will create a confidentiality agreement for you, or review an existing NDA. With us, you can be sure that your trade secrets and know-how will remain safe. We routinely handle everything within two days, always at a predetermined price.

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Author of the article

JUDr. Ondřej Preuss, Ph.D.

Ondřej is the attorney who came up with the idea of providing legal services online. He's been earning his living through legal services for more than 10 years. He especially likes to help clients who may have given up hope in solving their legal issues at work, for example with real estate transfers or copyright licenses.

Education
  • Law, Ph.D, Pf UK in Prague
  • Law, L’université Nancy-II, Nancy
  • Law, Master’s degree (Mgr.), Pf UK in Prague
  • International Territorial Studies (Bc.), FSV UK in Prague

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