Confidential Information

Farmer Freddy

Freddy is watching the rugby when Joe and Jacqui, his neighbours, walk in to join him.

“Jacqui, how’s your business going?” asked Freddie (at half time). “Business is great,” said Jacqui.   “But one of our staff has resigned and she’s going to work for a competitor.”

Just then, Freddy’s lawyer daughter, Pebbles, arrived.

“Pebbles, one of Jacqui’s employees is leaving to work a competitor!” said Freddy. “Yes,” said Jacqui, “I’m worried about her taking our client list, pricing information, and intellectual property. What can I do?”

“Well,” said Pebbles, “that will depend on what’s in her employment agreement. A gardening leave clause or a restraint of trade would be very helpful.”

“A gardening leave clause allows you to require your employee not to attend work during their notice period.  This keeps your employee out of the workplace and prevents them from immediately starting work for a new employer. The employee is paid while on gardening leave. 

“A restraint of trade clause can also be useful. However, these clauses often cannot be enforced because they are drafted poorly.”  

“Otherwise, you can write to your employee and remind them that they cannot use or disclose confidential information that belongs to you, even if they helped you create it. The duty to keep information like client lists, pricing information, and intellectual property confidential continues after the employment relationship has ended.   

“You could also write to the new employer and let them know they can’t encourage or use information received in breach of confidence.”

“It’s a good idea to monitor your employee’s computer use. Be careful, because the Privacy Act places limits on the methods and extent of monitoring.”   

“Employers are getting smarter about protecting their intellectual property. Now is a good time to review your employment agreements, contracts with key clients, and computer use policies. Talk to an employment lawyer, because restraint of trade clauses in particular can be tricky to get right.”

“Thanks, Pebbles” said Jacqui.

“Shush, the game’s on!” said Freddy.



The content of this document is necessarily general and readers should seek specific advice on particular matters and not rely solely on this document. 

If you would like more information on any of the topics in this document, please contact your usual Auld Brewer Mazengarb & McEwen adviser. 




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Sean Maskill