Business secret and non-competition

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A business secret is, within the meaning of the Act of April 16, 1993 on Combating Unfair Competition, all information including, inter alia, the entrepreneur's know-how and knowledge, his financial, commercial, technical, operational and public relations data, as well as research, analyzes, studies and plans for the entrepreneur's activity. These data may also concern his clients or partners. This information is important due to the negative consequences of disclosing it to unauthorized persons. The prohibition of competition is understood broadly. These are activities manifested not only in direct competition with the company of another entrepreneur, but also sharing information about another company with third parties.

Enterprise secret - the essence of protection

Access to the trade secret by third parties or competition could expose the entrepreneur to damage. It is not only a material loss (e.g. the use by another company of a refined project in which the entrepreneur has invested), but also the loss of planned benefits (e.g. implementation of the entrepreneur's project by another company and failure to achieve the planned profit). Therefore, the protection of trade secrets is justified by the economic interest of the entrepreneur. In addition, the company protects its reputation with the confidentiality of the company.

Any sensitive data and private information used by paid "haters" on the Internet or leaked to the competition could jeopardize the good name of the company. The entrepreneur could then claim damages, but it is a long-term process, and in business what is important is what is here and now.

It should be remembered that confidential information, as well as a trade secret, does not have to relate strictly to the business sphere. Events in the company, employees' behavior and their relations with the participation of members of the management board or persons cooperating with them are information that is considered confidential. All information that relates to the trader and is not publicly disclosed is confidential. In case of doubts as to what is confidential information, apart from your own discernment and decency, it is worth referring to the provisions in the agreements with the other party.

Company secret - methods of protection

The most popular business secret regulations are internal regulations, confidentiality agreements and competition clauses. Usually, when starting work, along with the contract, the employee signs the regulations, which clearly define the rules in the company - also regarding the handling of information. More and more often there is a provision that remuneration is confidential information and the employee should not disclose it. The provisions in the regulations oblige the employee to use them. Apart from them, entrepreneurs decide to submit other forms of securing business secrets.

Confidentiality Agreement

Competitive clauses, confidentiality agreements (NDA) oblige us to keep secret and not to disclose to anyone (except authorized persons) any confidential information. Often, in the course of performing a contractual obligation, various information is available to the employee. However, regardless of the form in which this information is made available or its source, you should keep it to yourself. The information obtained in this way may be used only for the purposes of cooperation, e.g. between an employee and an entrepreneur. When dealing with third parties, remember to restrain yourself and not to disclose information or its source, both in whole or in part, whether to customers or other persons, without the entrepreneur's authorization to do so. Usually, it is also forbidden to copy, duplicate and thus disseminate even fragments of information. If, on the other hand, cooperation requires the use of such information for the purposes of the company's development, it can be made available with the express consent of the entrepreneur.

The Civil Code provides for liability not only for intentional acts, but also for gross negligence. By negligence should be understood as recklessness, oversight. Such a situation in the context of trade secret protection may be failure to exercise due diligence to protect information against access by third parties.

Example 1.

Leaving the monitor with customer data in a place visible to other people (non-compliance with the so-called clean screen policy).

In the event of calls by law enforcement agencies to disclose data, which is required by law, the person is obliged to immediately inform the entrepreneur. Pursuant to the decision of the prosecutor or the penal and fiscal authority, the employee is released from professional secrecy. Nevertheless, he should always inform the entrepreneur about this fact and consult with him on the scope of the information provided. It may turn out that it will provide information, for example, with the data of natural persons who are not completely covered by the call.

Example 2.

Letter from the prosecutor's office requesting access to the entrepreneur's data.

The contracts often state that the employee undertakes to remove all confidential information after the end of the cooperation. An additional security for the entrepreneur is a written declaration of the performance of the above-mentioned obligation. It is a practice to be bound by a contract also after the termination of cooperation, even for several years.

Particularly important information, the disclosure of which could harm the employer, can be secured by a contractual clause in which one person undertakes not to disclose confidential information about the company.

Failure to sign a confidentiality agreement may result in the entrepreneur not starting cooperation or talks.

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Non-competition clause

The employee's non-competition is governed by the Labor Code. It applies both during the employment relationship and for a specified period after its termination. The non-competition clause, as well as the obligation to maintain confidentiality - with regard to the secret of the company, is aimed at protecting the good of the company. Activities that overlap with the employer's activities are considered to be contrary to the employer's interests. This means that an employee cannot work in one company:

  • run your own company in the same industry,

  • run a business through a third party,

  • hire in consultancy with third party companies.

The prohibition of competition results from the law or from the contract between the employee and the employer. The statutory prohibition of competition applies to members of management boards and supervisory boards of capital companies, while the contractual prohibition is included in the Labor Code and is in the form of a contract based on a separate contract - or a clause in the employment contract. The prohibition resulting from the act is formulated by the provisions of the Labor Code and the Civil Code on a general clause ordering the care of the employer. In the case of contracts of mandate, due diligence is required in the performance of the mandate. A provision in a non-competition agreement or a separate contract regulating these issues is an additional security and often indicates the exact contractual penalty for non-compliance with it.

The non-competition agreement should contain:

  • non-compete obligation period,

  • the amount of compensation for compliance with the non-competition clause.

Attention!

Compensation for an employee for not taking competitive actions after termination of employment is a minimum of 25% of the employee's remuneration from the entrepreneur for the entire duration of the non-competition agreement.

The requirement of validity of such an agreement is a written form. If the contract were concluded orally, it would not apply. One could only refer to the provisions of the Civil Code and the Labor Code, looking for liability in the provisions for acting against the good of the employer or for liability for damages.

Attention!

The material liability of the employee for the damage caused (employment contract) is limited to 3 of his salaries at the given employer.

Consequences of not signing the regulations on business secrets

An employee who does not want to sign such a contract must take into account the consequences: he may not be allowed to perform his work or withdraw from it, which may result in the termination of the contract.

Business secret violated

The entrepreneur has the right to demand immediate cessation of the breach and removal of its effects within the period specified in the contract. In the event of disregarding the task and difficulties with the implementation, the entrepreneur may demand the payment of a contractual penalty in the amount specified in the contract. If this is not established, it is possible to claim compensation on the general principles of the Civil Code.

The difference between the NDA and the competition clause

A confidentiality agreement (NDA) can be signed regardless of the form of employment you choose. It is often practiced even in the initial discussions of cooperation between entrepreneurs. In the course of discussions and planning of the business model, entrepreneurs provide various information about the state of their activities. It is important that this information, in the event of failure to cooperate, is not used against the entrepreneur. It is particularly important to sign such an agreement during talks with a competing company. The use of the company's ideas by the competition may deprive the company of a stable position on the market for a long time. A confidentiality agreement is also signed with persons providing services to the entrepreneur, who are not employees employed on the basis of an employment relationship (employment contract).

A competitive clause, on the other hand, is a provision in an employment contract or a separate contract, as indicated in the Labor Code. It aims to protect the employer against the competitive actions of the employee outside the company. The employer then pays appropriate compensation for failure to engage in competitive activities. Working in a new place would require the employee to use the experience gained by him at the previous employer and would often implement ideas from the previous job or a trade secret would be used.