How can employers control the risks of employees either badmouthing the business in public or simply leaking confidential corporate information. Osborne Clarke’s Jessica Corsi suggests ways and means.
One of the nightmares that often faces marketing services agencies is publicity. Not publicity generated by a brilliant new advertising campaign, or by the appointment of a brilliant new creative director. Rather, the publicity generated from within the organisation by disgruntled employees or the key confidential information relating to the business' future exposed by the former finance director to his new agency. This can range from leaks of true and damaging information to the trade press (sometimes an employer can have barely formulated a restructuring proposal before news of a "cull" has hit Campaign), to general badmouthing of individuals down the pub on a heaving Friday night.
As in all these things, the issue is one both of prevention and cure.
On the prevention side, contracts of employment (and agreements through which freelancers are engaged) should contain appropriate confidentiality provisions preventing individuals from divulging confidential information both during and after their employment.
Such provisions can range from the very basic to full blown and very specific post-termination restrictions. As, without appropriate contractual provisions in place, the law will only protect a trade secret from being disclosed even after termination of employment, and "trade secret" status is hard to achieve, it is vital to identify which employees will have the most access to confidential information and to take appropriate steps.
In order to achieve appropriate protection, "confidential information" must be properly identified and defined – for instance, this would be likely to include documentation and information relating to business strategy, finance, proposed and fledgling campaigns, drawings, designs, and so forth. The other problem employers can seek to prevent is that of workers getting things off their chests to mates in the trade who happen to be, or at least to know, trade journalists. Contracts of employment and disciplinary policies should be drafted to ensure that it is clear that giving statements to the press or to outside parties (whether on or off the record) without express prior permission constitutes gross misconduct and grounds for summary dismissal.
The next question is – what can an agency do when there is a leak, or when confidential information is being used by a former employee to further his new business?
If the contractual documentation includes the provisions outlined above, there may be a number of options. One may be to dismiss the culprit, providing there is adequate evidence to support any conclusion which may have been drawn and a fair procedure is followed.
Another may be to seek an injunction to prevent further information being divulged, and, ultimately, to seek damages against the individual in respect of any loss which may have been caused by that breach of contract.
Any legal process, however, is highly stressful, expensive and tends to attract further publicity. The reputational damage that can be caused in this way sometimes can be irreparable and lead to the demise of the business. The wisest way to try to prevent such things from happening is to make sure that employees' contracts are well structured – and to keep close counsel.