Summary
- A confidentiality breach occurs when an employee discloses sensitive business or personal information without permission.
- Such breaches can amount to gross misconduct, causing reputational damage, financial loss and potential legal liability.
- Employers should investigate promptly and may take disciplinary action, including dismissal, depending on intent and impact.
- This guide explains what happens when an employee leaks confidential information for UK business owners and the steps to manage the issue.
- It is prepared by LegalVision’s business lawyers, a commercial law firm that specialises in advising clients on employment law and workplace confidentiality.
Tips for Businesses
Act immediately to contain the breach and investigate what happened. Follow a fair disciplinary process, considering whether the conduct was intentional. Ensure contracts and policies clearly define confidentiality obligations, and take legal action where necessary to prevent further misuse or recover losses.
An employee leaking confidential information is a serious breach of trust and legal obligation, where sensitive business or client information is shared without authorisation, potentially causing reputational damage and financial loss. Employers must respond promptly by investigating the breach, managing disciplinary action, and taking steps to limit further harm, particularly where the conduct may amount to gross misconduct. This article explains what to do if an employee leaks confidential information and how to manage the situation.
What is Confidential Information?
Confidential information is information in your business that is protected. It is protected either because:
- your employees have been made aware that it is confidential; or
- it is evident to your employees that they should not use it.
You may inform your employees about confidential information through clauses in their employment contracts and employment policies, procedures and rules. You might also have separate confidentiality agreements in place that specifically outline what your business considers to be trade secrets or non-public information.
Confidential information could be, for example:
- employees’ personal information, such as bank details and home addresses; or
- business information, such as customer lists and financial information.
Actions When an Employee Leaks Confidential Information
You should take immediate action if your employee or staff member leaks confidential information. For example, you may need to inform the affected party about the breach, perhaps through a Data Compliance Officer. However, as an employer, you will need to take action in terms of the member of staff.
Below is a guide about what you should do regarding your member of staff who leaks confidential information.
1. Inform Your Staff Member
The first action to take is to inform your staff member that you are aware of their breach. When doing so, you should ask them to give you confirmation that they will no longer misuse the confidential information.
2. Consider Disciplinary Action
When your staff breaches confidentiality, it will likely be a disciplinary matter. However, before you can decide this, you will need to:
- determine if you have made it clear in your employment rules, policies and procedures that your staff cannot breach confidential information and what the consequences may be if they do; and
- promptly investigate the matter. A thorough investigation will require you to gather evidence, interview staff members, and ask for witness statements.
3. Take Formal Disciplinary Action
The outcome of your investigation will determine whether you need to take formal disciplinary action.
You do not need to commence formal action if your employee did not intend to leak confidential information but instead made a mistake. For example, they may have been rushing when sending an email. In this instance, an informal letter may be appropriate, warning them that you will take formal disciplinary action if the behaviour is repeated.
Where your member of staff’s breach of confidential information was intentional, you may decide to take formal disciplinary action. It is best practice to follow your disciplinary and grievance procedures in these circumstances, which should be full and fair. You will need to hold a formal disciplinary meeting, which will lead you to decide what steps to take, including potential termination of employment.
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4. Consider Legal Action
Suppose the employee does not satisfactorily confirm they will stop misusing your confidential information. Alternatively, your employee may have disappeared from work. In that case, you may be able to make a legal claim against them. Your claim could be in the form of a legal injunction (a ban on your employee from using the confidential information) or damages (monetary compensation for loss due to their breach). The court will decide which remedy is suitable for the circumstances.
Key Takeaways
If your staff member leaks confidential information, this is serious regarding their employment with you and the effects on your business. Therefore, you will need to take action when discovering a breach of confidentiality. You should carry out a full investigation to allow you to establish what has happened. Your investigation will help determine future action, such as commencing formal disciplinary action. A breach of confidential information could ultimately result in your termination of the employment of a member of staff or even legal action.
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Frequently Asked Questions
A breach of confidential information is where a member of staff shares confidential information without the permission of the person who owns it.
When your staff member leaks confidential information, you will likely need to take formal disciplinary action. However, this will depend predominantly on whether the breach was intentional, and you will need to investigate to establish this. It is best practice to conduct informal procedures first, such as speaking to the employee in question.
Yes. You may seek remedies such as an injunction to stop further disclosure or damages for losses caused by the breach, depending on the seriousness of the situation.
No. You should first investigate whether the breach was intentional. Accidental breaches may warrant informal action, while deliberate conduct is more likely to require formal disciplinary procedures.
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