Confidentiality and Non-Disclosure: Protection of Employer’s Proprietary Interests after Termination of Employment

Employment Law Guide

 

Confidentiality and Non-Disclosure: Protection of Employer’s Proprietary Interests after Termination of Employment


Date Published: 23 March 2020 



 

(a) Confidential information

An employee has a duty of good faith during the course of employment. This includes an implied duty not to disclose confidential information to persons who are not entitled to receive it and not to make unauthorised use of trade secrets or confidential information for his own benefit.

This obligation of non-disclosure or confidentiality continues after the employee has left the employment of the employer. However, the obligation is limited in scope after termination of employment. Only in so far as the information is a trade secret or is highly confidential in nature so as to amount to a trade secret can the employee who has left the employment be restrained from disclosing or using it.

An employee’s employment contract and/or a termination agreement may provide that the duty of non-disclosure or confidentiality in relation to the employer’s confidential information survives the term of the employment. A clear definition of confidential information should be included.

For contractual restrictions on disclosure of an employer’s confidential information to be enforceable:

  • the information must be of such a nature that the employer believes would be injurious to him if it were released;
  • the employer must believe that the information is confidential or secret and is not already in the public domain;
  • the employer’s belief above must be reasonable;
  • the information must be judged in the light of the usage and the practices of the particular industry; and
  • the employer must limit the dissemination of the information and not encourage its widespread publication.

 

(b) Duration of a non-disclosure or confidentiality obligation

There is no specified legal limit to the duration of a confidentiality obligation binding on an employee after termination of employment. On an application for an injunction restraining the breach of a non-disclosure or confidentiality obligation, if the court’s view was that the protected information had lost its quality of confidence with the passing of time or it was already in the public domain, then it would not grant an injunction restraining disclosure.

If the court took the view that the information ought to continue to be protected but for a limited time, then it could grant an injunction to prohibit disclosure for a specified further period, based on what it considered reasonable in the particular circumstances. A confidentiality or non-disclosure clause would not be void if it was for an indefinite period or for a period the court considered excessive, but it would be enforced only for the period the court held was reasonable. In certain circumstances restraint for an indefinite period may be reasonable.

 

Please note that this section of the Employment Law Guide is a summary provided for general information purposes, aimed at aiding understanding of Singapore’s employment law as at the date of writing. It is not exhaustive or comprehensive and reading this memorandum is not a substitute for reading the text of the various statutes to fully understand the extent of the obligations owed. This guide should also not be relied upon as legal advice.

 

CNPLaw’s Labour and Employment Lawyer

Pradeep Kumar Singh Admin Partner at CNPLaw

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    Pradeep acts for corporations, whether they are private or listed companies, on all aspects of their business including advice and drafting of documentation on investments, joint ventures, mergers and acquisitions and restructurings. Pradeep is “Recommended” by The Legal 500 Asia Pacific 2021 and is rated as a “Highly Regarded” lawyer by IFLR1000 Thirtieth Edition.


    Bill Jamieson is a Partner at CNPLaw LLP. Bill is an English lawyer who is also registered to practise Singapore law in the areas of corporate law, banking and finance and securities laws. He enjoys working in the diverse and dynamic Asian market and helping his clients to achieve their goals.
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      Bill’s practice focuses on corporate financing transactions, investment funds, mergers and acquisitions, private equity, and employment law matters. His experience includes 10 years in the City of London and over 20 years in Asia. Before joining CNP, Bill was a partner in a well-known international law firm. He is recommended lawyer for Corporate and M&A, Banking and Finance, Investment Funds and Labour and Employment in Legal 500 Asia Pacific 2021. Bill is one of the firm’s contacts for Interlaw, a network of independent full-service corporate law firms ranked by Chambers and Partners in its highest category, “Elite”, amongst all global law firm networks.


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        Pei-Ling has over 23 years of legal experience and has advised clients with Malaysian and Singaporean interests on their cross-border transactions, joint ventures, investments, commercial and technology agreements. Pei-Ling is recognised as a recommended lawyer for Banking and Finance by the Legal 500 Asia Pacific for 2021.


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          Senior Associate
          Marvin is a Senior Associate in the Corporate Advisory team. His main areas of practice include corporate advisory and general employment matters. Marvin is recognised as a Lexology Legal Influencer for employment within the Asia Pacific Region in quarter four of 2020. Read the employment articles written by Marvin by clicking on the link below.


          Employment issues are of fundamental concern to both individuals and corporations alike. This is especially so given the growing emphasis on human capital development across the world. Such issues involve an intricate interplay between commercial objectives and normative considerations. Here at CNPLaw, our lawyers strive to help our clients find the balance required to nurture a positive working environment. We advise both employers and employees (whether local or foreign) on the areas below.




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