What is Employee Confidentiality?

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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 23 March 2020
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Employee confidentiality is a term used to describe a covenant that exists between an employer and an employee. This covenant has to do with knowledge or information that is entrusted to the employee as part of his or her assigned duties, or any other proprietary data that the employee encounters as a result of working for a specific employer. With this type of commitment, the employee agrees to not share or discuss any type of data considered proprietary with anyone outside the company without express permission from authorized company officials to do so. The term is also used to describe a similar covenant in which the employee agrees to not share information about salary or benefits with other employees.

It is not unusual for text that describes the terms of employee confidentiality to be included in the contract of employment that is presented at the time the individual is hired. Often, the exact verbiage is structured to be in compliance with any laws or regulations that govern the use of proprietary knowledge obtained during the course of employment. This includes but is not limited to such data as customer listings, financial data obtained from the accounting records of the firm, any information regarding existing or pending patents in the possession of the employer, or any other data that the employer deems as proprietary information.


Failure to maintain employee confidentiality can often lead to termination of employment. In situations where proprietary information is sold or otherwise provided to competitors, the employer often has the option of taking legal action against the former employee. This is especially true if the employer can provide evidence that it has suffered financial losses as a result of a breach of confidence on the part of the former employee.

A second type of employee confidentiality has to do with the covenant between the employer and the employee to not disclose personal information found in the employee’s personnel records. This includes data such as medical information, the results of criminal background investigations, or even information regarding wages, salary, or benefits that have been extended to the employee. With this type of confidentiality covenant, both parties agree to not disclose this data to others within the company structure without obtaining the express consent of the other party. This means that employees do not discuss their current salary or wages level, or how much of a commission or bonus they were provided, unless the employer determines that sharing that information is permissible. In the event that either party is ordered by a court of law to reveal proprietary data as part of an ongoing criminal investigation or as testimony in a court hearing, employee confidentiality is not considered to be breached and no type of punitive action can be taken as a result of the party submitting to the directive of the court.


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Post 1

There is a third type of confidentiality that exists: the covenant between the employee and HR that any complaints that are filed will remain confidential.

I had to complain to HR once because my boss was telling me I wasn't contributing enough to the "company" charity. I was extremely offended. I have charities I contribute to, and I resent being asked to give more in the worst way, especially when it's not a charity I necessarily support financially. I don't like having my arm twisted.

It wasn't my boss's business how much I contributed, and I had to count on confidentiality that my HR person wouldn't go telling everyone I'd filed a complaint. That can be deadly to someone's job. The head man had a conversation with my boss about twisting arms for contributions, and that was the end of it, but the arm-twisting stopped, so I was happy.

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