Confidentiality agreements between employers and employees are far from unusual.
Over the years, a variety of industries including the media, legal and financial sectors and the NHS have been forced to introduce elements of confidentiality into their employment contracts, either to comply with data protection laws or to protect their valuable trade secrets and confidential information.
One of the most high profile cases concerning confidentiality agreements to reach the public domain is the recent ‘unmasking’ of racing driver Ben Collins as The Stig from the BBC TV programme ‘Top Gear’, following a lengthy attempt by the BBC to keep his identity under wraps.
When it emerged that Collins planned to disclose his identity in his autobiography the BBC sought an injunction to prevent HarperCollins from publishing the book, on the basis that such publication would be a breach of the confidentiality agreement that Ben Collins had signed.
The BBC argued that knowing the identity of The Stig would harm viewers’ enjoyment of the programme. Collins argued that he has the same right to write and publish his autobiography as other TV stars do despite having signed a confidentiality agreement.
The High Court refused to grant the BBC an injunction blocking the publication of the former Top Gear stars autobiography. Reasons for the decision are set to be given in a private judgement to follow.
In light of the Court’s decision in favour of Ben Collins, some employers may wonder whether confidentiality agreements are worth the expense and effort involved. Employers will often need assistance from lawyers when drafting and enforcing confidentiality agreements which may appear to be an unnecessary cost if there is a likelihood that the employee will be allowed to breach it in any event.
The law on confidentiality agreements
The law relating to confidential information is a complicated and, in many cases, uncertain area.
Even without a written confidentiality agreement, each contract of employment contains an implied duty that the employee will act with fidelity and good faith towards his employer. This would include respecting the confidentiality of the employer’s commercial and business information. This duty is implied into all employment relationships, whether or not this is reflected in writing and will bind the employee for the duration of their employment.
The courts have identified a number of different classes of information that an employer may want to keep confidential, ranging from trade secrets at one end of the scale to information which is already in the public domain at the other. As a general rule, where information is found to amount to a trade secret it is more likely that the court will consider it worthy of protection. On the other hand, where information has already been made public, it is unlikely to be considered worth protecting. The question of whether the information is capable of protection or not becomes less clear-cut where it falls somewhere between a trade secret and public information.
The reason that the courts have developed such an approach to the protection of different types of information is that they are required to balance the interests of the employer with those of the employee and arrive at a decision which causes the least damage overall. In the Collins case, the Court may have decided that the potential of diminished audience enjoyment (as a result of knowing the identity of The Stig) would have less of a detrimental impact than the damage to Collins caused by not being able to publish his autobiography. The fact that the identity of The Stig has been an open secret for some time may also have had a bearing on the Court’s decision as this would diminish the detrimental impact on the BBC resulting from Collins’ disclosure.
However, even though there are instances where a court will find in favour of an employee and allow a disclosure, a prudent employer should ensure that confidential information is sufficiently protected. This will involve specifically identifying what information they consider to be “confidential information” and creating an express duty of confidentiality which may continue to bind the employee even after the employment relationship has ended. The benefit of such written agreements is that they provide evidence of the parties’ intention to keep the information confidential and it alerts the employee at an early stage to their obligations.
Conclusion on the BBC v The Stig confidentiality agreement case
An employer considering using confidentiality agreements to protect its trade secrets and confidential information should not be deterred by the decision in the Collins case. They remain a legitimate way to protect a business’ interests provided that the employer acknowledges that no matter how well drafted, some types of information will not be capable of protection.
To find out more about the use of confidentiality agreements in protecting your business, please contact a member of our Employment & HR team on 01332 340 211.