9

Say that "James" does work under a valid nondisclosure agreement. During an argument with his manager, he declares that he intends to leak information covered by the NDA.

Is there anything the employer can do to preemptively stop him, or must it wait until he actually leaks the data?

Improve this question
6
  • 1
    Given that the employee has no legal right to the information, the obvious reaction would be to cancel all their data access privileges. If they cannot work without those privileges, the employment might be terminated. But that is not legal action, that is common sense.
    – nvoigt
    Commented Oct 28 at 12:57
  • 8
    @nvoigt Cancelling data access privileges will not keep the employee from disclosing information that was given verbally.
    – doneal24
    Commented Oct 28 at 13:28
  • 1
    @nvoigt What is “no legal right to the information” supposed to mean? NDA are mostly about things the person already knows or will in fact need to know and be authorized to learn (or access, as the case may be) for other reasons like doing their job.
    – Relaxed
    Commented Oct 29 at 16:17
  • @Relaxed It means it isn't their information to begin with. For example if someone says "I will leak the blueprints of the latest company product", they have no legal right to see the blueprints and you will certainly as a first step revoke their access to those blueprints. That doesn't help if they have already copied them or can draw them from memory, but a judge might be wary if someone threatens you with something and you don't take the easiest, most common sense preventive action.
    – nvoigt
    Commented Oct 29 at 16:26
  • @nvoigt But if the situation even comes up it's because they have access to the blueprints in the first place. If they didn't need them, you wouldn't have granted this access and the whole discussion is moot. Surely someone who hacked your system or stole blueprints wouldn't sign a NDA either. Once you learn that they intend to misuse the information, you might of course revoke this access but I don't see where this notion of either having or not having a “legal right” to the information comes from or how it helps analyzing the situation.
    – Relaxed
    Commented Oct 29 at 16:32

1 Answer 1

Reset to default
13

Anticipatory breach of a fundamental term of a contract provides the other party the immediate right to forego any futher obligations on their part, and also an immediate cause of action (Central Trust Co. v. Chicago Auditorium Ass'n, 240 U.S. 581 (1916)).

The equitable remedies of specific performance or injunction would generally be available to prospectively protect confidential information (Rugen v. Interactive Business Systems Inc., 864 S.W.2d 548 (Tex. App. 1993)).

For additional certainty, many non-disclosure agreements specifically say that injunctive relief is available as a remedy. It may be worded something like (borrowed from a sample from the Association of Corporate Counsel):

party A is entitled to obtain injunctive relief against the threatened breach of this Agreement or the continuation of any such breach by party B, without the necessity of proving actual damages...

Improve this answer
4
  • Could it potentially also be referred for prosecution under the various blackmail/extortion laws? And, perhaps, fraud if there was evidence that they had never intended to comply with the NDA?
    – Perkins
    Commented Oct 28 at 16:27
  • You can refer anything for prosecution, but in my experience, at least, police aren't especially interested in business disputes that could be resolved with civil litigation.
    – bdb484
    Commented Oct 29 at 1:43
  • @Perkins Note that in some jurisdictions there is a concept of a private prosecution, meaning that a company could criminally prosecute in such a situation.
    – Gregory Currie
    Commented Oct 29 at 6:46
  • @GregoryCurrie Any chance you know of an example? A quick google search seems to imply private prosecutions are strictly civil actions.
    – Chuu
    Commented Oct 29 at 14:40

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .