Protecting Confidential Business Data Against Errant Employees

While it is common for a business to protect itself against competitors and external market forces, many firms fail to recognise internal threats.

Yet employees, and in particular unscrupulous ex-employees who choose to take off with commercially sensitive information, pose a direct threat to the bottom line of a business.

And in the digital age where confidential customer databases and electronic information can be effortlessly transported and replicated, departing employees can easily take confidential data with them, often going unnoticed by unsuspecting employers.

This information can often form a large part of the value of a business so it is vitally important to legally protect your firm against cases of this unethical practice.

Employees have a duty to comply with data confidentiality policies but our experts are often asked what they can do to prevent staff breaching this obligation when they leave the firm.

As highlighted in a recent blog, drawing restrictive covenants into employment contracts can help prevent employees leaving a business to work for a direct competitor.

Other post-termination restrictions are also available. These protect firms against data theft by legally preventing employees taking confidential information with them when they leave a business, such as client lists, business plans and trade secrets.

In particular the threat of prosecution can act as a strong deterrent, helping to enforce confidentiality.

In a recent case, a paralegal was convicted of committing a criminal offence under the Data Protection Act after taking sensitive information before moving to a rival law firm.

Offences under section 55 of the Data Protection Act 1998 are punishable by fines of up to £5,000 in a Magistrates’ court or an unlimited fine in a Crown court.

While perpetrators will not be sentenced to jail for this crime, these fines act as a huge deterrent for possible offenders.

Putting effective data confidentiality procedures in place and drawing these policies into employment contracts can protect your business by helping prevent such acts of data theft, omitting the need for action at court level.

For more information about enforcing confidentiality or to discuss any aspect of data protection, contact Michael Shroot on or 0161 761 8087.