What is a Breach of Confidentiality?

A breach of confidentiality in employment occurs when an employee discloses sensitive information belonging to their employer without authorisation from the employer. This information typically includes trade secrets, client lists, business strategies, and other data considered vital to a company’s competitive advantage. A breach of confidentiality can be intentional or accidental, but regardless of intent, the ramifications can be significant.

How to identify a breach of confidentiality?

Identifying a breach of confidentiality involves understanding the nature of the information and the context of its disclosure:

• Legally Protected Information: Disclosure of information protected under laws such as the Data Protection Act constitutes a breach.
• Contractual Agreements: Violation of non-disclosure agreements or employment contracts detailing confidentiality obligations and/or clauses.
• Unauthorised Disclosure: Any sharing of confidential information without proper authorisation or consent from the employer.

What are the consequences of a breach of confidentiality?

The repercussions of breaching confidentiality can be extensive and varied, affecting both the individual responsible and the organisation. Consequences may include:

• Legal Action: Employers can take legal action against employees who breach confidentiality agreements, potentially leading to injunctions, damages, and, in severe cases, criminal charges.
• Loss of Trust: A breach of confidentiality can significantly damage the trust between an employer and their workforce, as well as between the company and its clients and customers.
• Financial Loss: Unauthorised disclosure of sensitive information can lead to financial losses, especially if it involves trade secrets or client information that gives the company a competitive edge.
• Reputational Damage: The company’s reputation can suffer, potentially leading to a loss of business and a decrease in client or customer trust.

What are your rights when accused of a breach of confidentiality?

Understanding your rights is crucial whether you’re an employee accused of a breach of confidentiality or an employer seeking to protect your company’s confidential information. Rights and protections include:

• Right to a Fair Process: Employees have the right to a fair process, including the right to be heard and to defend themselves against allegations of a breach of confidentiality.
• Protection under Employment Law: Various employment laws and regulations provide protections for employees, ensuring they are not unjustly accused or penalised.
• Confidentiality Agreements: Both parties have rights and obligations under confidentiality agreements. Employees should understand these agreements’ terms, while employers must ensure they are fair, reasonable and enforceable.

For an in-depth discussion on the legal framework surrounding confidentiality agreements and restrictive covenants, you can refer to our employment team’s expertise on the matter.

How to deal with a breach of confidentiality?

Addressing a breach of confidentiality promptly and effectively is crucial to mitigate its impacts. As an employee, if you believe you may have accidentally or unintentionally disclosed your employer’s confidential information then it is best to report this at the earliest opportunity using the company’s relevant process, if possible. Otherwise, reporting it to your line manager or HR could point you in the right direction for any action.

As an employer, if a potential breach of confidentiality has arisen then the appropriate steps include:

1. Investigate: Conduct a thorough and fair investigation to understand the breach’s scope and impact.
2. Containment: Take immediate action to contain the breach of confidentiality, such as securing compromised accounts or retrieving leaked information.
3. Legal Consultation: Consult with legal professionals to understand your rights and obligations and to plan any necessary legal action.
4. Communication: Communicate transparently with all affected parties, including employees, clients, and, if necessary, the public.
5. Review Policies: Review and strengthen confidentiality policies and training programs to prevent future breaches.

Compensation for a Breach of Confidentiality

Victims of confidentiality breaches, whether individuals or organisations, may be entitled to compensation for damages suffered. This can include financial losses directly related to the breach, reputational damage. Legal advice is essential to navigate these claims effectively.

Is there a defence to breach of confidentiality?

In certain circumstances, there may be defences available to those accused of breaching confidentiality, such as:

• Lack of Confidential Nature: Demonstrating that the information was not confidential or was already public knowledge.
• Consent: Showing that there was consent from the rightful owner for the information to be disclosed.
• Whistleblowing: In some cases, disclosing information in the public interest, such as to expose illegal activities, can be a defence.

Conclusion

Breach of confidentiality in the employment context is a significant issue that can lead to legal, financial, and reputational damage. Employers and employees alike should familiarise themselves with their legal protections and obligations to prevent and address breaches effectively.

For further guidance and support, contact our employment team and we can provide invaluable assistance.