Why It’s Important To Maintain Confidentiality In The Workplace

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In any business, the know-how of the day-to-day activities of your business is what keeps your business up and running.

More importantly – it is usually what makes you stand out from your competitors.

So, making sure that this expertise and information is kept within your business is very important.

It might seem straightforward and normal business etiquette, but you want to make sure our business is safe from any potential breaches of confidentiality.

This article will talk about workplace confidentiality – why it’s important, and what you can do to maintain it.

Why Is Confidentiality Important?

Workplace confidentiality refers to any confidential information that you come across in the course of business.

There are three main types –

the personal information of customers
employee information that managers collect, and
“proprietary information”

This article will focus on the third of these – proprietary information, which you can otherwise simply call “business information” or “trade secrets”.

Business information can include anything from business documents to the ins and outs of business processes, financial data, list of clients, the software code of your product and marketing strategy.

Normally, this kind of information isn’t available to the public, and most definitely not your competitors.

Why?

In today’s highly competitive climate, this confidential information is what could give you an edge over your competitors – so you want to keep it safe!

Examples Of A Breach of Confidentiality In The Workplace

To help you understand the importance of maintaining workplace confidentiality, it would be good to explore the different ways it can be breached.

Let’s start with some examples.

If your former employee leaves to work for a competitor and shares your list of clients, this could potentially leave your business dry.

Or, imagine a contractor creates a software code for your new product, but then uses the exact same software code when they are contracted under another business.

Then that would mean you have an identical product to another business.

This is the last thing you want happening to your business, and so there are a few things you can do to avoid it.

Maintaining Confidentiality In The Workplace

There are legal and non-legal steps you can take to make sure that confidential information is protected in and outside of your workplace.

Do You Have It Down In Writing?

Confidentiality Clauses

It’s always a good start to make your approach to confidential information clear from the outset when you bring new employees, contractors, service providers, suppliers or customers on board.

You would start with a legally binding contract, but it’s always a good idea to include a “confidentiality clause”.

This is an important first-step: safeguard your business information from being stolen by anyone that comes into contact with your business.

Non-Disclosure Agreements/ Confidentiality Agreements

Confidential information can sometimes make its way outside of the workplace – so you want to make sure you’re protected from that too.

Even though you may not be formally engaging with someone as an employee or contractor, you might still be sharing business information through commercial discussions.

For example, an investor may be interested in your business.

This could involve a series of discussions where you might be disclosing lots of confidential business information to make your business look good – from your financial data to clientele and sales strategy.

If this is the case, it is always a good idea to have a Non Disclosure Agreement (NDA), or a Confidentiality Agreement, to make sure that investor doesn’t use or share that confidential information anywhere else.

Not sure how these work? IP Australia gives you a quick run-down here.

IP Assignment Deeds

This is a type of legal document that completely transfers ownership of any intellectual property (IP) created by one person to another person.

IP is key to the success of many businesses – and making sure that your IP is protected also makes sure that your business is protected (we wrote about IP here!).

In business, having this legal contract will make sure that any employees, shareholders or contractors who access or contribute to any intellectual property made within the course of your business will therefore assign that IP right back to you.

For example, if you hire a contractor to help create your company logo, you want to make sure that company logo belongs to your company.

Otherwise, that contractor will have every right to resell and distribute that logo to other businesses.

Under an IP Assignment Deed, that contractor will assign all rights of the logo to your company, so that only you and your company have an exclusive right to use it.

If you’re not sure about what protecting intellectual property means for your business, you can read our guide.

Confidentiality Policies

Lastly, you may also want to consider a Workplace Policy.

When you run a workplace, it’s important to make sure all your workers understand their roles, responsibilities and obligations.

Well-drafted workplace policies ensure your guidelines are consistent and practical.

This is a good opportunity to include rules around workplace confidentiality, which will constantly remind your workers that you take it very seriously.

Do You Have Office Practices To Protect Your Confidential Information?

While it’s great to have confidentiality policies and even pay secrecy clauses, there are non-legal steps you can take too.

In today’s world, technology has made it easier to access all kinds of sensitive and confidential information within a business.

You want to make sure that you are using a secure storage platform that prohibits outside access or potential security threats.

Moreover, there are many new tools that enable you to restrict access and permissions to certain information and documents within your business.

This helps narrow down who can see sensitive and confidential information, and also promotes a workplace culture of confidentiality.

For example, you could restrict all the accounts and financial data of your business to the specific people who work with this information directly.

This avoids other workers from accidentally (or intentionally) stumbling across this sensitive information, which may invite bias, discrimination and criticism.

Next Steps

So, we spoke about why maintaining workplace confidentiality is important.

Where to from here?

As a first step, it’s a good idea to seek a lawyer’s help to make sure that all your contracts include confidentiality clauses.

Then, it’s good to start thinking about IP Assignment Deeds, NDAs and Confidentiality Policies.

You want to make sure you’re doing it right, as these confidentiality clauses can be tricky, and sometimes its wording can leave a few gaps.

Further, there could be specific legal requirements for confidentiality agreements.

Each state in Australia has its own laws relating to workplace privacy and surveillance (more details at the bottom of this page).

So you want to make sure you seek a lawyer’s help to draft your contracts and pay particular attention to the confidentiality provisions that would give you peace of mind.

If you’d like help getting your contracts straightened up to protect your confidential information, or would like a consultation on your options going forward, we’re here to help!

You can reach us at 1800 730 617 or team@sprintlaw.com.au.

Regie Anne Gardoce

Regie is the Legal Transformation Lead at Sprintlaw, with a law degree from UNSW. Regie has previous experience working across law firms and tech startups, and has brought these passions together in her work at Sprintlaw.

Tomoyuki Hachigo

Tomo is the co-founder of Sprintlaw and a commercial lawyer with a broad range of legal experience. Before starting Sprintlaw, he was an M&A lawyer at a top-tier law firm advising businesses of all sizes from large corporates to startups.