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What is to be borne in mind when dealing with trade secrets?

Essentially, a business or trade secret is understood to mean anything that is not generally known and in regard to the confidentiality of which the employer has an objective interest. That is usually information to which an employee is given access within the scope of his or her work, and which concerns commercial or technical procedures relating to the company. Clear infringements, in this respect, would, for example, exist if any enforcement engaged in in the course of business or an impending business closure were to be made known. Otherwise, the question of what is confidential is primarily also guided by the details of the corporate objective. Whether a particular leisure-time activity violates business interests is also related to what position the employee holds within the business organisation. The higher the employee’s position, the more stringent are the standards that are to be applied in terms of the confidentiality obligation. As soon as a company has sensitive business and trade secrets, it is recommended to adapt the contract with every employee accordingly.

In this respect, the question also arises of when we are talking about leisure time and when about work.

“Leisure-time activities” are usually understood to be any activities that the employee engages in outside working hours and outside the place of work, and which do not (at least indirectly) serve the purpose of fulfilling his or her professional duties.

Mutual fiduciary duties exist in the employment contract relationship between the employer and employee. That means that, on the one hand, the employee is obliged to be essentially “loyal” and fair to the employer, and, on the other hand, the employer in turn essentially owes this very loyalty and fairness to the employee. The fiduciary duty therefore prohibits the employee from emphatically and evidently infringing the employer’s interests, and thus also has an effect on his or her leisure time. For example, the employee naturally has to preserve business or trade secrets even in his or her leisure time.

The time after the employment contract has come to an end, in particular, is also to be accordingly considered, and a corresponding contractual obligation to keep business and trade secrets should be included in the employment contract. Contractual penalties may be agreed, in this respect. In regard to the scope and design of such a confidentiality obligation, it is, in any event, advisable to obtain specialist assistance when designing the employment contract or corresponding confidentiality agreements.

It is, however, essentially the case that the employee has personal rights outside his or her work on the corporate premises. Therefore, it is not possible to encroach upon the personal sphere of the employee excessively.

An infringement of the confidentiality obligations imposed could have the consequence, at the company, of the employer changing the sphere of activity of the employee –if that is possible, based on the specific employment contract. In the case of more major infringements, a suspension or dismissal of the employee could come into question. The employer may, furthermore, also assert the damage incurred to it through the business and trade secrets being made known vis-à-vis the employee, based on tort law. If a business secret is disclosed, negligent conduct on the part of the employee is sufficient.

Should corresponding business secrets exist for the company in a material form, it is recommended to consider this already prior to concluding the employment contract, and have correspondingly detailed contracts drawn up by a specialist.

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