In today’s competitive business environment, companies spend a great deal of time and money on obtaining developing and applying knowledge that may give them an edge over other competitors in a particular sector.

The widespread use of new technologies, the globalization of the economy, the growth in outsourcing and high turnover of personnel in the current employment market, are factors that have led innovative companies to be increasingly susceptible to information theft—commercial and strategic plans, information about clients and suppliers, substantial technological innovation, etc.—by disloyal employees, or at times merely due to their negligence.

Although employees are obliged to keep secret and confidential, sensitive information that they may access while providing their services—in accordance with the principles of good faith and due care that should preside over the employment relationship—in practice, defining the scope of this obligation is complex. This is particularly true if the formulas used by employers to safeguard the information are quite general, or lack the necessary precision for the intended purpose—to avoid the use of confidential information by an employee for his/her own benefit or that of third parties.

It is therefore essential for employers to adopt protective measures that clarify and specify the scope and enforceability of this duty, especially in those cases in which employees, because of the department they are in and/or the duties they perform, have access to strategic information for the company’s activity and business.

It is in this context that Community Directive 2016/943, of June 8, on the Protection of Trade Secrets was published. The Directive introduces a positive definition of “trade secrets” and specifies the requirements for certain information to be classified as such:

  • the information must be secret in the sense that it is not readily accessible to persons who do not generally use it while performing their duties
  • it has commercial value, that is, it is sufficiently important as to give the employer using it a competitive edge
  • it has been subject to reasonable steps to keep it secret.

Based on the guidelines established in the Directive, employers should put these reasonable protective measures into effect, which guarantee that the employee is aware of the information that must remain secret and the possible consequences of revealing or stealing it. Companies have various tools available for this purpose:

  • contractual clauses regarding confidentiality,
  • provisions in the code of ethics or code of conduct
  • action protocols with respect to the treatment of certain information
  • express mention in the collective labor agreement and definition of the conduct in such agreement
  • publication of informative notes or internal circulars

Since these tools or protective measures are compatible, the employer has numerous alternatives to protect confidential information. However, even though implementing these tools may seem easy in principle, to prove effective, employers must be very careful when choosing the means of protection, in their drafting and in their subsequent communication to employees. In this regard, formulas that are too general and also those that classify all business information as confidential undermine these steps.

It should also be borne in mind that pursuant to the limitations imposed by the Directive itself, it cannot be invoked to limit the mobility of employees and, specifically, a) to limit the use by the employees of any information that does not constitute a trade secret pursuant to the provisions of same; b) to limit the use by employees of the experience and skills acquired honestly throughout their professional career; c) to impose additional restrictions on employees in their employment contracts other than the restrictions imposed by virtue of EU law or the laws applicable in Spain.

Therefore, when faced with the unlawful disclosure of trade secrets by employees it is essential for employers to have adopted in advance, measures to identify this content as secret as well as reasonable protective measures. These measures should respect the limitations established by the Directive and by the Spanish legislation that is published in order to transpose it—the deadline to transpose the Directive is June 9, 2018. Otherwise, the measures adopted may prove unsuccessful and the chances of success in the event of a court action by the company would drop considerably.

Jesus Tejado

Garrigues Labor and Employment Law Department