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What do you do if your employee violated a confidentiality clause?

On Behalf of | Jul 1, 2022 | Contract Law

As a part of your employment contracts, you make sure to have confidentiality agreements in place. You don’t want to spend all this time putting together your business plan and building up your brand just to have someone share your research and ideas with a competitor.

You make all new employees sign the contract if they want to work for you. Those who refuse don’t get hired on, and those who do get the opportunity to work together. When they leave the business, you just ask that they don’t work with another party in the same industry for at least one year and don’t share your business’s information with competitors.

What can you do if you find out that someone leaked information?

There may come a time when your employee leaks information. At that point, you have a few choices to consider.

  1. You could ignore the leak if it’s not one that is important to your business.
  2. You could reprimand the employee, putting them on notice for violating the contract.
  3. You could pursue a lawsuit against the employee for any financial damages caused by the breach in contract.
  4. You could fire the employee and pursue no further action.

What you do in this circumstance will depend on a few factors, such as what kind of information was leaked, if it was general knowledge, if the leak was intentional or unintentional or if you have or have not lost money because of the information getting out to competitors.

A broken confidentiality agreement could lead to a lawsuit

There are times when your only real course of action to recover your losses could be to pursue a lawsuit against your employee. You may decide to pursue alternative courses of action, like mediating to find a solution, but it is your right to make a claim if you have financial losses because of a breached confidentiality agreement.

To get the most out of your case, you will need to make sure you have evidence of real, monetary losses. If you cannot show that you have losses linked to the broken confidentiality agreement, you may not be able to sue. You should still be able to send a cease and desist letter to the offender, so they are notified that they should share no further information.