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Protection of a Business from the Employment Law Perspective: A comparative journey in selected European jurisdictions

12. 12. 2016  |  Sasha Štěpánová

During a recent European meeting of the global Employment Law Alliance, of which KSB is a member, comparative discussions were held on employment aspects of protecting a multi-national business, in terms of know-how, confidentiality and trade secrets, across various European jurisdictions. Let’s look today at a brief introductory comparison of some of these issues in Greece and in England & Wales.

Using local law to effectively protect a business for confidentiality obligations and trade secrets

England & Wales

Confidentiality obligations in the employment context will usually be set out in the employee's contract of employment or equivalent document. The common law (i.e. case law) will govern the interpretation of those contracts where there is ambiguity. It will also sometimes imply confidentiality obligations where the contract is silent but where, for example, the relationship between the parties or the nature of the information concerned means that legal obligations arise. The typical provisions in an employment contract protecting confidential information are a duty not to disclose the business' confidential information (an obligation which can survive the duration of the contract, where the information amounts to trade secrets) and a requirement to return all company property (including intellectual property created in the course of employment) upon termination.

Greece

General protection in terms of business confidentiality, trade secrets protection and know-how is contained within the Greek Civil Code, which provides general protection: the employee’s duty of loyalty is stipulated together with the general tort provisions, as well as with the principle of good faith and public morality and their consequences in the event they are violated.

The Greek Unfair Competition Law provides for criminal sanctions against any employee who has unlawfully and without relevant authorization revealed business confidential information or know-how to a third party or unlawfully uses such information or know-how in detriment to the company's interests. No explicit legal provisions exist regulating restrictive covenants. The enforceability criteria on restrictive covenants being determined on an individual case-by-case basis by the Greek courts.

How often are non-compete agreements used?

England & Wales

Non-compete agreements are frequently used, either as standalone agreements or provisions within  agreements, also contained in shareholder agreements. They are generally enforced by way of an interim or final injunction or a damages claim/account of profits. To support an application for an interim injunction, employers will have to show (inter alia) some evidence that the employee has been acting in breach of the covenant, that it has caused them harm and that, on balance, it is right to grant an interim injunction to protect the employer's interests until trial. To support a claim for damages (or a final injunction, the employer must show (on the balance of probabilities) that the covenant was enforceable and that the employee breached it, causing the employer loss.

Greece

Contractual restrictive covenants are the ones most often used in Greece, in the form of a term in the employment agreement, in particular in cases of high ranking employees such as executives or Board of Director members. They usually provide for a post–employment, non- compete period which includes non solicitation.

How often does litigation occur in respect of business know how and confidentiality?

England & Wales

Where the confidential information in question is valuable, businesses will often litigate. If the breach of confidentiality has not already occurred or the information not misused but they have reason to believe that it will occur or be misused, the first step may be to apply for an injunction to stop the misuse or further misuse of the confidential information. Interim injunctions can be granted within a matter of days. Where the breach has already occurred, businesses are more likely to see an account of profits (whereby the party in breach must surrender the profits he/she has made from their use of the confidential information) or damages to compensate the proprietor of the confidential information for any loss suffered. Such litigation can be extremely costly as it can last for a number of years and the losing party will usually be required to pay the successful party's costs.

Greece

Litigation in respect of post-employment restrictive covenants is not that common in Greece. The cost and length of the procedure depends on the nature of the procedure. While interim relief measures proceedings are speedier (1 week for a decision to be issued granting a provisional order and about 1-2 months for a decision to be issued granting interim measures relief) and come with relatively low costs, the standard proceedings either of the employee who finds the clause excessively binding or for the employer to seek compensation for its breach, as well as moral damages, are lengthier (more than 6 months – 1 year) and cost more (since they additionally include the respective stamp duties and court fees etc.).

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