Confidentiality clause in employment contracts, how does it work?

Confidentiality clauses are much more common in employment contracts than would be expected at the time they were first regulated. In fact, nowadays, it is rare to find a company, regardless of its size or activity, that does not include them in the documents that bind it to its employees. Chances are that you too, at some point, have signed one. Read this post to clarify your doubts and if you have any other questions you can contact us, as lawyers specialising in labour law we are happy to answer your questions.

But do you really know how confidentiality clauses work? The answer to this question, which may seem simple at first glance, is unknown to most workers who sign them in their contracts. Here we will try to clarify everything that labour law specifies about them so that this does not happen to you.

What is a confidentiality clause in the employment contract?

The incorporation of the confidentiality clause in the employment contract is intended to ensure that, once the professional relationship between the employee and the company has ended, the employee will not reveal secrets about its operation, management or any other similar subject to the next company in which he/she works, especially if it may fall within the company's competence. In many cases, this also refers to the period during which the employee is employed by the organisation.

Where does the confidentiality clause appear?

This clause, in order to be in force, must appear in the employment contract. In this sense, when its incorporation is due to the internal promotion of a specific employee, it will be included as a subsequent annex in the event that it does not appear in the original document. In any case, as mentioned above, it is often included for employees of all categories.

What if it does not exist in the contract?

The fact that the confidentiality clause is not specified in the contract does not mean that the employee is not obliged to maintain the secrecy of the information obtained from the company after the employment relationship ends. In fact, this is one of the most important duties of care and good faith by which employment law is governed. This is why the inclusion of such a clause is more a statement of an existing fact than an obligation that must be in writing in order to be effective.

What should be specified in the confidentiality clause?

The wording of the confidentiality clause must include a number of details. In particular, the duration of the confidentiality clause must be specified, which does not have to be limited to the period of validity of the employment contract. This means that even if the employment relationship is terminated, the obligation not to disclose information about the company can remain in force. But only if this is clearly specified.

All information about a company cannot be confidential. For this reason, the law requires it to be clearly specified which data may not be disclosed. Typically, this usually relates to the company's organisational procedures and systems, customers, computer software used, and so on.

For its part, it is very common for the company drawing up the contract to make its employee responsible for the safekeeping of the information with which he or she works on a regular basis. This implies that he or she undertakes not to use the data and documents on his or her computer or to disclose his or her personal password for purposes other than strictly work-related. Nor may they make copies using hard disks, external memory sticks, etc.

Does the confidentiality clause refer to defamation?

Not necessarily. In fact, the imposition on the employee to refrain from making comments to third parties that may be considered defamatory about the company or any of the people who are part of it for the purpose of discrediting or discrediting must appear separately. In any case, a period of validity must also be specified, as in no case can it be a lifelong commitment.

What happens to an employee who breaches a signed confidentiality clause?

It depends on when the breach of the clause occurs. In this sense, if it occurs when the employment relationship is in force, i.e. when the worker performs his activities for the company that has hired him, the company can proceed to sanction him as long as it detects the fact and proves it. Specifically, this is considered a serious misconduct and can lead to disciplinary dismissal, i.e. without compensation, in particularly flagrant cases.

On the other hand, in the event that the disclosure of company information protected by the confidentiality clause occurs after the end of the employment relationship but not the specified extension, the company is entitled to take legal action against the subject. This would essentially be done by filing a claim for damages.

And what does the worker get for signing the confidentiality clause?

Many workers mistakenly believe that the acceptance of the confidentiality clause in the contract is an obligation imposed by the company. Fortunately, however, they are mistaken. Labour law states that its imposition must be accompanied by adequate financial compensation.

This financial compensation must appear in the employment contract that has been signed. Specifically, it must be included in the wording of the confidentiality clause itself or, failing that, in the final salary breakdown at the end of the document. The obligation to make this payment is understood as a kind of indemnity intended to compensate for not being able to work in certain companies.

Conclusions on the confidentiality clause

In short, the confidentiality clause, which we have all come across at some point in our professional careers, is an instrument by means of which companies protect their interests with regard to the irresponsible use of their employees for their own benefit when they are hired by other companies, especially when they are considered to be competitors.

However, in exchange for their silence during the time specified in the clause, the employee is entitled to additional financial remuneration in the form of compensation. It should be borne in mind that, in a basic concept, labour law recognises it among the duties of diligence and good faith, so it may not be necessary to include it in the document in many cases.

We hope we have been helpful and that, from now on, you will be much clearer about what confidentiality clauses are, how they affect you in the performance of your duties and what your rights and obligations are in relation to them.