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Confidential Information

What is confidential information?

Business information that is in the nature of a trade secret or commercially sensitive, for example customer lists, contact details, customer requirements, sales figures and price information. Confidential information can relate to any subject matter and be stored in any form (whether in hard copy, electronic or personal memory).

What is not confidential information?

Information that is already in the public domain (other than a database which, although derived from publicly available information, may still be capable of being protected) is not confidential. General “know-how” or knowledge and information acquired as part of a trade or profession is not confidential information.

What obligation of confidentiality does an employee owe?

An implied duty of trust and confidence not to use or disclose, either for the benefit of a competing business information or to the detriment of the employer, confidential information acquired by an employee during the course of employment. A duty of confidentiality may also extend to information received by an employee from third parties.

Can the protected information be extended?

An employer can extend the definition of confidential information either in the contract of employment, or by identifying information as confidential during employment and taking practical security steps and using passwords to preserve the confidentiality of that information.

How is confidential information protected?

If there is misuse of confidential information then an employer can apply to the Court for an interim injunction restraining the use of that information. A Court may also grant “springboard relief” restraining a former employee from approaching customers whose details have been removed from the employer, or preventing the poaching of employees. The duration of the remedy needed will depend on the facts of each case, but the Court may apply similar considerations as those in restrictive covenant disputes, including the duration of the restraint sought, the nature of the relevant information and what is required to protect an employer’s legitimate interests. Most proceedings are resolved at an interim stage by agreement, but if the dispute continues then a Court will decide the issue at trial and order a final injunction and/or damages and costs as appropriate.

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