In Part 1 of this article, I explained how an ethically-based promise can be more powerful than a legally-enforceable contract in preventing employees from divulging trade secrets and other confidential information when they leave your company. But the ethical promise has limitations. For one thing, it works only with ethical employees. And it has power only to the extent that the employee is earnest in making it. In other words, the employee must "truly subscribe" to the promise.

The Five W's

The challenge, then, is to ensure that employees subscribe to the promise not to divulge company secrets. Following journalism's "five w's" approach, I will look at the who, what, when, where and why of employee assent to confidentiality agreements (in reverse order of the way they are taught in journalism school).

Where?

Where should employees look for important company policies? An obvious place is in employee manuals or handbooks. But sticking an ethical agreement in the middle of the employee manual is not advisable. Let's face it, most employees will read manuals, if at all, just once - when they start working for the company. Even issuing new copies of the manual from time to time will not generally get employees to read them.

Consequently, many organizations put their ethical policies and agreements in a separate form. They ask employees to sign the form acknowledging that they have read and understood it. Some companies ask employees to renew the agreements annually as part of their job contracts. This calls attention to and thus raises the employee's consciousness of the ethical obligation.

Another way to raise consciousness is to post your confidentiality policy (and other important policies) in conspicuous places where employees see them on a daily basis. This does not mean a cluttered bulletin board.

When?

When should you ask employees to give their word? "Always" may seem a simplistic answer. But there is truth to the old adage "out of sight, out of mind," especially in the context of securing agreement to ethical obligations. Agreement by employees is not likely to be strong if it is in the context of some document seen or given only on the first day of the job. Employees will eventually forget what they agreed to do - and not to do - on their first day of a job.

This is why some companies require employees to re-sign confidentiality agreements annually, while others reiterate the content and implications of such policies during annual reviews or personnel meetings.

What?

What should a well-written confidentiality policy include? If you are going just for a legally enforceable agreement, certain boilerplate should do the trick. But formal legal language is not likely to foster the critical subscription necessary to make ethical obligations binding. For that you need language that explains, justifies and motivates the confidentiality policy. For example, let your staff in on how much your organization relies on intellectual capital. Spell out the potential damage that could result from outside disclosure and encourage a team attitude toward confidentiality as a critical part of everyone's job description.

Who?

Who should establish your company's policies on confidentiality and other key issues? Many organizations let employees participate in the drafting, justification and promulgation of such important policies. These companies see the value of treating employees as business partners and team players. The resulting contribution to autonomy and empowerment goes a long way toward gaining ethical subscription to the resulting agreements.

Of course, it is also important to involve senior management in the creation of these policies. Their participation provides a solid and visible sign of management's commitment to ethical issues. After all, if top managers appear to slight ethical issues, how can they expect employees to subscribe to them?

Why?

Why make the protection of confidential information an ethical obligation? For the reasons I discussed in Part 1 and recapitulate below.

Conclusion

When it comes to protecting confidential information, do not be satisfied with just a contract. That may give you a right to claim damages if the employee breaks the agreement but it probably will not deter the employee from breaking the agreement to begin with. Although you do need legal protection, if it is preventing breaches that you are after, you had better also make the protection of confidential information an ethical obligation.

EDITOR'S NOTE

Nick O'Shay will return next week with a new chapter of Diaries of an OSHA Inspector.

HEALTH & SAFETY LAW TRAVELOGUE

UNITED STATES OF AMERICA

Norm Keith - bio

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

The last stop on our world tour of workplace safety is the United States.

The American workplace health and safety system, like the American legal system in general, is built on a unique federalist structure in which power is shared by national and state governments.

National authority to regulate workplace safety derives from the Occupational Safety & Health Act of 1970, which created the Occupational Safety & Health Administration (OSHA) and empowered it to promulgate regulations governing specific areas of health and safety. The OSHA rules represent minimum standards. But states have the authority to impose standards that are more stringent. Enforcement is conducted by OSHA and by equivalent state agencies that have received OSHA approval to run autonomous state programs.

In addition to "traditional" enforcement activities such as workplace inspections, OSHA has developed a number of voluntary programs, including the Voluntary Protection Program (VPP) that give employers incentives to submit to more rigorous health and safety standards. Organized labor and other groups have criticized the Bush Administration for emphasizing voluntary programs at the expense of traditional enforcement. However, traditional OSHA enforcement appears as robust as ever, at least according to the inspection data. Moreover, while the budget for voluntary programs has increased, OSHA still spends more than twice as much on traditional enforcement activities.

Health & Safety Profile: U.S.

• Population: 293 million
• Labor Force: 147.4 million
• Total Accidents: 1,315,000
• Total Fatalities: 5,559
• Life Expectancy: 77.43 years
• GDP per Capita: $37,800
• Government Type: Federal Democratic Republic
• OHS Legislation: OHS statute and regulations on national and state levels. Federal regulatory enforcement is moderate. State enforcement tends to be moderate but varies from state to state. Criminal enforcement is minimal.

Note: Accident figures are from 2003

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.

Story Tools:  E-mail this to a friend  Print This Post Top