Indian Courts have ruled that the only post-termination restrictions that can be allowed are non-disclosure terms and non-solicitation terms.

Confidentiality Clause/Non-Disclosure Clause

Last updated on Jun 21, 2022

What is Confidentiality?

The organization or company you are employed with has a right to protect its trade secrets and other confidential business dealings. Hence, a clause in your employment contract restricts you from sharing or disclosing any confidential information of the employer to anyone outside the organization. This clause is known as a confidentiality clause. It is sometimes referred to as a non-disclosure clause as well.

Typically, the term ‘confidential information’ is widely defined to cover almost all information that you get from your employer. You should read the definition carefully to make sure that you are not violating the confidentiality clause during or after your employment. Apart from information specifically marked as ‘confidential’ or ‘proprietary’, it is safe to assume that information like technical and business information, intellectual property rights, formulae, software programs or codes, internal reports, trade secrets, inventions, know-how, business strategies, marketing tactics, financial information, information about your employer’s clients and/or customers and other commercially valuable information is meant to be kept confidential.

When does Confidentiality apply to you?

The confidentiality clause applies not only while you are in the company’s employment, but also after. If you share confidential information after your employment has ended, it would be a violation of your contract and your employer may file a case against you.

This does not mean that you cannot be employed by a company doing similar work. Legally, you have the right to work wherever you want to, but you cannot disclose any confidential information from your previous employer in your new employment. For example, if you were working with P&G before and are now offered a job with Unilever, you will not be restricted from taking up the job. But you cannot disclose trade secrets of P&G to Unilever.

No Confidentiality Clause in Agreement

If there is no confidentiality clause in your agreement, you have a duty of fidelity to your ex-employer to not disclose to others or to use for your own profit the trade secrets and confidential information you learned during the course of your employment with them. In some cases, you can be sued for criminal breach of trust also.

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