As a successful company in the technology industry, you have valuable data at your disposal. This data must not fall into the wrong hands and that is why your employees' employment contracts contain a confidentiality clause as standard. But now there is more.
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| Mr. Tjeerd Hoekstra Lawyer at CMS |
The Trade Secrets Protection Act (Wbb) came into effect on October 23, 2018. This law, based on a European Directive, was drawn up in response to the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). The Directive aims to provide a uniform application to the protection of sensitive business information of companies within the European Union. This uniform application is necessary because there is a different level of legal protection within the EU. This leads to fragmentation of the internal market and that is undesirable.
Sensitive business information must be protected because that information is the return on investments that companies make to create a competitive advantage in the knowledge economy. This valuable know-how and business information – which must remain confidential and not be made public – is labeled a “trade secret”. Examples mentioned include: intellectual property rights, technological knowledge, business plans and market strategies.
The Wbb defines a trade secret as (i) not generally known or easily accessible, (ii) containing information that qualifies as a commodity and (iii) subject to measures to keep it secret (for example surveillance of the company premises or digital protection measures such as encryption ). In addition, the Wbb describes which conduct is considered unlawful and provides a list of legal measures to combat an infringement of a trade secret, such as a ban on disclosure of the trade secret or seizure and delivery of infringing goods.
Impact on current confidentiality clause
Within your company, it is the employees who are primarily concerned with trade secrets. The question is therefore what impact the Wbb has on the confidentiality clause in the employment contract.
First of all, it is noted that the Wbb does not intervene in an existing confidentiality clause. This means that if a confidentiality clause provides a broader description of information that must remain secret than the Wbb, that broader description continues to apply to the employment contract. Conversely, with a limited confidentiality clause in the employment contract, an employer can also separately invoke the Wbb in the event of a breach by an employee. Finally, the Wbb has no effect on an existing non-competition clause. Enforcement of a non-competition clause by invoking the Wbb will therefore not be possible.
Action to adjust an existing confidentiality clause is therefore not necessarily required, although the minister has indicated that adopting the definition of trade secret will contribute to more clarity with regard to the confidentiality clause in an employment contract. This does not alter the fact that it may be attractive to adjust the confidentiality clause. By including a reference to the Wbb in the confidentiality clause, the information to which the trade secret relates can be clearly described.
In addition, in the event of a breach of trade secrecy, the employer can demand accelerated compliance with the confidentiality clause by invoking the provisions of the Wbb. To this end, the information made public must meet the conditions of the concept of “trade secret”. In practice, it will be interesting how the judge deals with this, because (old) case law for sanctions for violation of a confidentiality clause requires a systematic, substantial breakdown of the employer's sustainable business flow. In addition, it may be important for a new employer to explicitly ask an applicant whether he has knowledge of "trade secrets" of his previous employer, because the new employer can also be held accountable under the Wbb if involvement in the disclosure of trade secrets can be demonstrated. . It is therefore advisable to analyze the impact of the Wbb on the HR policy of your company.
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