You can't prevent good employees from leaving your company and joining a competitor. But you can prevent them from taking along proprietary information about your safety program (and other secrets) when they go.

Traditionally, companies have relied on a legal strategy to protect secrets. They make the employee sign a clearly worded written confidentiality agreement. But while it's important, a legal strategy by itself often isn't enough to protect the company's vital secrets. Something else is needed, something that many companies overlook: an ethical strategy. Ethical strategies shore up the weaknesses in legal protections. Here's how.

Why a Confidentiality Agreement Is Not Enough

Employees who handle confidential information about safety (or any other operation) should sign a confidentiality agreement. But there are limits to the protections offered by a contract. When one side breaks a contract, the other side's legal remedy is to collect damages. This remedy kicks in only after the breach has occurred.

What contract law is not designed to do is prevent the person from breaking the contract in the first place. And, when it comes to protecting confidential business information, an ounce of prevention is worth a pound of cure.

Ethical Strategies Are Preventive

Strategies that emphasize ethics pick up where contract law falls short. Their intent is to keep a person from breaking the contract (or engaging in some other act harmful to the company). Like a contract, an ethical agreement is a promise to do or refrain from some action (in this case, disclosing confidential information after leaving the company).

But an ethical agreement has a certain moral power that legal agreements often lack. Consequently, the ethical agreement may be much more effective than a contract in deterring the targeted behavior (and thus obviate the need for litigation). Ethical agreements don't supplant legal obligations; but they inject them with a greater sense of imperative.

Limitations of an Ethical Strategy

But a moral agreement is also subject to limitations. First of all, the employee who makes the commitment must have moral character. Hopefully, you can rely on your HR people to keep employees who lack a sense of morality off your payroll.

Employees who are moral must also "truly subscribe" to the principles to which they give their assent. Without this, the promise has no moral backing in the individual's mind and is easy to break. So the key question becomes: How do you get employees to "truly subscribe" to ethical obligations?

Conclusion

Next week, in Part 2 of this series, I will offer five suggestions.

HEALTH & SAFETY LAW TRAVELOGUE

JAPAN

Norm Keith - bio

By Norm Keith, B.A., LL.B., CRSP

There are only two stops left on our world safety tour.

Japanese workplace health and safety laws are similar to but less rigorous than their American and Canadian counterparts. Enforcement is also less consistent. However, in the long term, there has been a steady decline in the number of workplace fatalities in Japan. At the end of the 1990s, average annual fatalities hovered around the 2,000 mark. Today, the number has been reduced to fewer than 1,600. One troubling point: there have been complaints that companies are not as assiduous about protecting their immigrant workers as their native ones.

Health & Safety Profile: Japan

• Population: 128 million
• Labor Force: 66.7 million
• Total Accidents: 125,918
• Total Fatalities: 1,548
• Life Expectancy: 81.04 years
• GDP per Capita: $28,200
• Government Type: Constitutional Monarchy and Democratic State
• OHS Legislation: OHS statute. Regulatory enforcement is moderate. There is no criminal enforcement.

About Norm Keith

Norm Keith, BA, LL.B., CRSP, is a partner in Gowlings' Employment and Labour Group, specializing in occupational health and safety law, workers' compensation, privacy law, labour and employment law, and alternate dispute resolution. He has extensive experience with wrongful dismissal, human rights, labour arbitration, judicial reviews, Ontario Labour Relation Board cases and fiduciary duty lawsuits.

To view his bio, click here. You can contact Norm by email here or by phone at (416) 862-5699.

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