Confidential Information and Ex-Employees

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An employer shares confidential information with an employee. When the employee departs, what obligation does that ex-employee have with respect to the employer’s confidential info?

In part 3 of our 3-part employment law series, we look at an issue critical for many technology-based businesses: trade-secrets and confidentiality. Courts in Canada have made it clear that departing employees owe certain duties to their employer. Many of these duties expire when the employment relationship ends. Any attempt to bind the employee after employment must be limited by time and geography. Put another way, non-competition and non-solicitation obligations must be limited by time and space if they are to hold up; otherwise, courts will strike them down as being an unreasonable restraint on the employee’s ability to earn a living. However, those time-and-space limitations do not apply to wrongful disclosure of “truly confidential or proprietary information” by former employees. Simply put, employees cannot disclose their employer’s secrets. Those obligations continue until the information is no longer confidential or proprietary, or limitation periods have passed.  As the court stated in a recent Alberta decision, Evans v. The Sports Corporation, 2011 ABQB 244 (CanLII) (http://canlii.ca/t/fl0b3): “It is illogical to suggest that an employer must, to validly protect its confidences and proprietary information, specify a reasonable date after which a former employee is free to use the information for his own benefit and to the detriment of the former employer.”

Lessons for business: Check your employment agreements to verify that this is covered.

Related Reading: Executives Depart with Secrets and IP

 

Published In: General Business Updates, Intellectual Property Updates, Labor & Employment Updates, Science, Computers & Technology Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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