Confidentiality clauses (NDA) protect the company from the disclosure of secret information. But re-reading them is extremely time-consuming.
In this article, we tell you all about these clauses, and suggest an innovative solution for doing so.
What is a confidentiality clause?
To protect business secrecy, companies caninclude a confidentiality clause in their employment contracts, whereby employees undertake not to divulge certain sensitive information.
Labor law specifically governs the conditions of such a clause. Legal experts must therefore be very careful when drafting such clauses. And especially when it comes to proofreading.
The purpose of a confidentiality clause is to protect professional secrecy. But to be valid, this clause must meet the requirements of employment law.
Definition of a confidentiality clause
The confidentiality clause (or NDA) prohibits the employee from passing on any confidential information to third parties, such as customers, suppliers, subcontractors, partners or even relatives.
Often implicit, this obligation can be included directly in the employment contract to ensure greater legal certainty. This is particularly the case for employees with access to sensitive data. For example, strategic or accounting information, contracts in the process of being signed, manufacturing secrets and so on.
This information must never be divulged to third parties. And certainly not to competitors.
Theconfidentiality undertaking thus protects the company against the disclosure of secret information during the term of the employment contract. But also, and above all, at the end of the contract. To be valid after termination of the employment contract, the NDA must expressly state this.
The validity of the confidentiality clause
The confidentiality clause must meet several conditions:
- The confidentiality agreement must be in writing and unequivocal. Depending on the sector of activity, you must also comply with the formalities laid down in industry or collective agreements.
- Clarification of confidential information : in line with the principle of freedom of expression, employees are obviously entitled to talk about their company. However, they are not entitled to divulge confidential information. It is therefore up to the legal department to specify what information is likely to harm the company.
- Justification: protected information must be justified, in particular to protect the company’s interests or because of the employee’s access to certain confidential data.
- Proportionality : the NDA must be proportionate to the intended purpose. Otherwise, judges will consider the clause unfair.
Confidentiality and other clauses in the employment contract
Confidentiality clauses are sometimes confused with other clauses in employment contracts. Here are the differences.
Non-competition clause
The non-competition clause prohibits the employee from working for a competitor’s company at the end of the employment contract. To be valid, this clause must be limited in time and space.
In this case, financial compensation is usually provided. This is not the case with a non-disclosure agreement.
Exclusivity clause
In the same spirit, a confidentiality clause should be distinguished from an exclusivity clause. The purpose of the latter is toprevent the employee from engaging in activities other than his or her current profession. And this for the entire duration of the employment contract.
Duty of loyalty
The employee must not do anything that could harm his employer. However, divulging confidential information is harmful to the company. Particularly if such disclosures are made to competitors.
In the event of a breach of this obligation, the employer is entitled to dismiss the employee for misconduct.
Obligation of discretion
This obligation is enshrined in the French Penal Code, article 226-3 of which stipulates that: “The disclosure of secret information by a person who is entrusted with it either by status or profession, or by virtue of a position or temporary assignment, is punishable by one year’s imprisonment and a fine of 15,000 euros”.
In this case, the obligation of secrecy is not directly the subject of a clause in the employment contract. Nevertheless, it forms the very basis of the confidentiality agreement.
It is precisely for this reason that an employee who breaches a confidentiality clause is exposed to a number of penalties, both contractual and penal.
Penalties for breaching the confidentiality clause
In the event of a breach of confidentiality, the employee is liable to be dismissed for misconduct, and will not be entitled to severance pay or compensation in lieu of notice in the event of serious misconduct or gross misconduct.
In addition, if the disclosure of confidential information causes damage to the employer, damages may be awarded.
Finally, the French Labor Code provides for penalties in the event of disclosure of company know-how. Under article L 1227-1, the employee is liable to 2 years’ imprisonment and a €30,000 fine.
How can you save time rereading confidentiality clauses?
In view of all the sensitive information involved, confidentiality clauses represent a major challenge for companies, and the legal department must therefore comply precisely with the conditions of validity of the clause during the drafting phase. And to ensure that no errors are overlooked, NDAs must be proofread.
This time-consuming activity is all too often relegated to the background. And with good reason, legal departments prefer to focus on the most valuable activities.
Fortunately, it is possible to guarantee the quality and rigor of these confidentiality clauses thanks to digital solutions.
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