Can employment contract prohibit post-termination disclosure of information that is not confidential?

Can an employment contract clause expressly prohibit post-termination disclosure of information that is not actually confidential? Most likely, no.

As a Singapore employment lawyer, I recently came across such a clause in an employment contract prohibiting indefinite disclosure of “any information” relating to the employer company.

Such clauses are not altogether uncommon.

Employers who draft their own employment contracts may think that they can do anything they wish.

But the courts do not simply rubber stamp every contract clause.

If parties agreed that the sun is deemed to be green in colour, it does not make that true.

If a clause prohibits disclosure of information that is clearly in the public domain, the clause would likely not be enforceable simpliciter.

An employer cannot use an express covenant to deem confidential what is on any view either part of the employee’s skill and general knowledge or otherwise not confidential. See Ixora Trading Inc v Jones [1990] FSR 251, cited in Argus Media Ltd v Halim [2019] EWHC 42 (QB) at [82].

In Clearlab SG Pte Ltd v Ting Chong Chai and others [2014] SGHC 221, Lee Sieu Kin J considered the classic case of Faccenda Chicken Ltd v Fowler and others [1984] ICR 589 on post-termination employment contracts on trade secrets and confidential information and opined that Faccenda Chicken did not deal expressly with the issue of whether employment contract clauses dealing with post-termination prohibition of disclosure of confidential information which is not trade secrets, “parties should be free to agree to protect the confidential information of the ex-employer, subject always to the restraint of trade doctrine … While the status of confidential information generally does not prevent it from being protected as a matter of agreement, it might, in the appropriate cases, affect the assessment of the reasonableness of the restraint”: at [75].

This means that generally, an employer can expressly prohibit post-termination disclosure of confidential information which is not trade secrets, but if such confidential information has become part of an employee’s skill and knowledge, then the restraint of trade doctrine applies to possibly render the clause unenforceable if deemed unreasonable.

However, if the clause prohibits post-termination disclosure of information that is clearly not confidential, then it is quite possibly unenforceable.

Apart from the legal issue, the question is whether enforcing such restraints are beneficial for employers.

Research suggests that aggressive enforcement leads to less learning, a loss of talented people–‘brain drain’, and less innovation in the long term, lower pay and reduced employee mobility, which may mean less incentive to learn on the job and in the long term, more difficulty hiring skilled workers.

While breach of confidentiality is a serious wrong, employers should be advised to consider if the information in question is truly confidential or considered an integral part of an employee’s skill and knowledge.