Question 130: Many Employees, when uploading corporate information to the media and social networking, often cite the reason they do not know it is the confidential information of an enterprise that is not allowed to post on the media or social networks. So what does the enterprise do to prevent Employees from citing this reason/minimise their doing so to escape from labour discipline?

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As matter of law, in order to provide a legal basis for an Employer to discipline any Employee when they disclose the enterprise’s confidential information on the media and social networks, the Employer should first establish the specific and clear details in the ILRs on the concept of confidential information and what acts of breaching confidential information that are regarded as a violation of ILRs. This is one of the principles Employers should strictly adhere to when deciding whether to proceed with disciplinary action.

However, the concept of confidential information is not currently defined and explained in the Labor Code and written guidelines on its implementation. Article 126.1 of the Labor Code only refers to the term “business secret, technological secret”, which is defined as one of the cases where Employers have the right to impose the disciplinary form of dismissal on Employees who “disclose their business secrets and technological secrets.” With this provision, if the Employer invokes the regulations on breaching confidential information as prescribed in the ILRs for disciplinary action in the form of dismissal against any Employee, such disciplinary action will be deemed inconsistent with Article 126.1 of the Labor Code.

To ensure that the Employer may exercise the right to discipline Employees in accordance with the labour law, experience shows that the Employer should include the concept of confidential information as part of business secrets, technology secrets. In particular, in order for the “business secret” be protected by law, the Employer, on his part, should also have the necessary measures to protect and prevent the business secret from being exposed and easily accessed[1].

Another important issue in the principle of disciplinary action is that the Employer needs to gather evidence that the Employee is the one who posts the corporate information on the media and social networks. At that time, the Employer does have the legal basis to discipline the Employee due to that the Employee has violated the obligation to “disclose business secrets and technology secrets” of the enterprise.

In addition, to avoid the case where Employees cite the reason that they do not know what confidential information is, Employers should take the following measures:

  • After establishment of the ILRs in accordance with the law (clearly stating the concept of confidential information as well as related violations that may be subject to disciplinary action), Employers must inform Employees and affix the main contents of the ILRs at necessary positions of the workplace in which the regulations relating to the confidential information are contained. In the event of any occurrence, Employees will not claim that they have not been informed by the Employer of the ILRs, including their obligation to maintain the confidentiality of any information; and
  • In addition, experience has shown that Employers should enter into confidentiality agreements at the time of entering into any contract with Employees specifying the liability for indemnity by Employees due to disclosure of corporate confidential information so that Employees understand the importance of information security needs of the business as well as the sanctions that they may suffer. This confidentiality agreement may be entered separately or incorporated as part of any LC.

[1]Article 84.3 of the 2005 Intellectual Property Law as amended and supplemented in 2011