Please note this blog post is written for employers, although we understand it may be of interest to employees as well. At this time, our firm only represents business owners and employers. If you need assistance with a legal matter as an employee, please consult a firm that represents employees.

breach of confidentiality

Almost all businesses will involve and contain certain confidential information.

Whether it is a secret recipe for your restaurant or sensitive client data, there will almost certainly be data and information that must be kept safe and classified. 

Unfortunately, however, it is not uncommon for confidential information to get out one way or another.

To make matters worse, workplace confidentiality violations are sometimes caused by employees who may work for that very business. 

When it comes to running a business, breach of confidentiality consequences can be dire. Thus, it is important to know when these situations might arise, the potential consequences, and what you can do in the aftermath.

“Employees are trusted with a great deal of very valuable information. Despite an employer’s best efforts, it’s not always possible to prevent disclosure of confidential information.” 

Employment Attorney Kristi Benson

When you are faced with a breach of confidentiality situation in the workplace, do not hesitate to contact BrewerLong.

Our team of Florida employment lawyers specializes in helping small and medium-sized businesses get through these types of legal disputes and more.

What Is a Breach of Confidentiality?

A breach of confidentiality occurs when proprietary data or information about your company or your customers is disclosed to a third party without consent. 

Breaches of confidentiality happen to companies each and every day throughout the nation. A breach might exist where a trade secret is shared with a competitor, an employee’s private information is disclosed, or clients suffer the consequences of careless privacy practices. 

These breaches can result from cyberattacks, insider threats, or accidental disclosures. They not only compromise sensitive information but can also lead to financial losses, reputational damage, and legal consequences for the affected business. Implementing robust security measures and employee training can help mitigate these risks.

Examples of Workplace Confidentiality Violations

So now that we’ve defined what a breach of confidentiality is, what are some breach of confidentiality examples? There are a variety of scenarios in which workplace confidentiality violations may occur. Regardless of the precise circumstances leading to the violation, the fact remains that breach of confidentiality consequences can be severe. 

Common confidentiality breach examples include:

  • Hacking can give bad actors unauthorized access to data through cyber attacks;
  • Fraudulent attempts to obtain sensitive information via email through phishing;
  • Misplaced or stolen laptops, phones, or storage devices containing confidential data;
  • Insider threats, such as employees or contractors misusing access to information;
  • Accessing confidential data over public or unsecured networks;
  • Discarding documents or devices without proper data destruction; and
  • Accidental sharing of sensitive information via email or other communication channels.

These are some of the most common ways confidentiality breaches can occur, but it’s important to remember that breaches can also occur in other ways.

Disclosure of Employees’ Personal Information

Employees provide substantial private information during the application and hiring process for a position. Such data might include credit information, social security numbers, and education history. 

Employers are prohibited from disclosing the personal information of their employees without prior authorization. Failure to keep this information confidential may constitute a breach of confidentiality. 

Client Information Is Obtained by Third Parties

Data breaches target businesses and individuals all over the globe. And unfortunately, such attacks have only increased with the rising popularity of social media and the internet. 

Hackers use emails, text messages, and online advertisements in an attempt to gain access to private information such as social security numbers, credit card information, or account passwords.

Security measures, cybersecurity training, and workplace internet use guidelines aim to prevent the missteps that can lead to a breach.

Any environment, not just online, lacking proper guidelines for privacy and security is susceptible to a breach of confidential information.

For example, two employees talking about confidential client information at a public place could inadvertently disclose that information to a passerby. In such a scenario, these individual employees may face breach of confidentiality consequences due to their actions.

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Breach of Confidentiality Consequences

Often, a breach of confidentiality is the result of the actions, or failure to act, of one or more individual employees. However, this does not mean that the business as a whole will not face any consequences. 

In fact, the unfortunate truth is that a breach of confidentiality by even one individual employee can result in many adverse impacts to the entire business entity.

Loss of Trust 

Confidentiality agreements aim to protect the secrets and operations of the parties involved in the contract.

Violation of the terms often results in the deterioration of those relationships and your reputation. Employees guilty of confidentiality breaches can face long-term consequences and find themselves blacklisted in the industry. 

However, it is possible that the industry could likewise lose trust in your business. A breach of confidentiality is a serious claim that has the potential to cause others to lose faith in you, your employees, and your entire operation. 

Thus, always take appropriate steps to prevent workplace confidentiality violations from occurring where possible.

Negative Impacts on Your Business

As customers, clients, and the community lose confidence in your ability to keep information confidential, this may lead to additional negative impacts on your business as a whole.

An internal breach of confidentiality can affect your business’s overall brand and reputation, both of which are crucial aspects of growing your business. As a result, your business could lose employees, future clients, branding opportunities, and more. 

Ultimately, this can result in a loss of valuable revenue for your company. 

Civil Lawsuits

Even more concerning for many businesses is the potential for civil lawsuits arising out of a breach of confidentiality.

Many victims file civil lawsuits against businesses or employees who breach their confidentiality. However, being put in the position of defending a breach of confidentiality lawsuit is never ideal for any business, whether it is a new, growing, or well-established one. 

The time and expense required to defend against such an action can put your business in an extremely difficult situation.

Criminal Charges

In some cases, breaches of confidentiality may even carry the possibility of criminal action.

Criminal charges arise only in extreme cases that resulted in significant financial, emotional, or physical loss to the victim.

For example, theft of intellectual property or using confidential information for financial gain could warrant criminal punishment. In the event of criminal violations, state or federal government officials prosecute the individual responsible for the breach. 

Legal Implications of a Breach of Confidentiality

When confidentiality agreements are violated, a breach of contract occurs, leading to legal action based on contract law. Regulatory violations may also occur since breaches can violate state and federal laws, such as data protection regulations.

These types of violations can result in fines and penalties, but companies can also be held liable for damages suffered by affected individuals or entities.

Proving a breach requires collecting evidence such as emails, documents, and other records showing unauthorized disclosure. Witness testimony from individuals who witnessed the breach or have relevant information is crucial.

Expert analysis, utilizing forensic experts to analyze data and determine the source of the breach, can also play a key role in providing evidence of the breach. However, the offending party can claim one of the following defenses:

  • There was no legal obligation to maintain confidentiality;
  • The information was disclosed with the consent of the affected party;
  • The information was already publicly available and not confidential; or
  • The breach did not result in any actual harm or damage.

Possible consequences or remedies include the following:

  • Monetary damages, 
  • Compensation for financial losses suffered by the affected party, 
  • Injunctive relief through court orders to prevent further unauthorized disclosure, and 
  • Rescission of contracts or agreements impacted by the breach. 

Regulatory penalties may also include fines and sanctions imposed by regulatory bodies for non-compliance with data protection laws. 


What Preventative Measures Can Businesses Take?

While businesses can’t always prevent intentional breaches, they can implement several strategies to safeguard against a breach of confidentiality lawsuit and protect sensitive business and client information from being disclosed inadvertently.

By proactively addressing potential vulnerabilities, companies can minimize the risk of unauthorized disclosures and legal repercussions.

  • Robust IT security protocols. Invest in advanced cybersecurity measures such as firewalls, encryption, and intrusion detection systems to protect sensitive data from unauthorized access and cyberattacks.
  • Regular employee training. Conduct frequent training sessions to educate employees on data protection practices and the importance of maintaining confidentiality. This ensures that all staff members understand their role in protecting sensitive information.
  • Thorough vetting processes. Screen potential employees and business partners meticulously to ensure they have no history of confidentiality breaches. This step helps minimize the risk of insider threats.
  • Non-disclosure agreements (NDAs). Use NDAs and other contractual protections to legally bind employees and partners to confidentiality terms. These agreements provide a legal framework to take action if a breach occurs.
  • Access control. Limit access to confidential information to only those who need it for their roles.
  • Data encryption. Use advanced encryption methods to protect digital information from unauthorized access.

Implementing these measures helps significantly reduce the risk of breaches and protect sensitive business information. Regularly updating security protocols and maintaining a culture of confidentiality within the organization are also crucial steps in prevention.

By proactively addressing potential vulnerabilities, businesses can better safeguard their intellectual property and maintain trust with clients and partners.

What Can My Business Do About an Employee Who Caused a Breach?

If an employee is responsible for workplace confidentiality violations, you may be wondering what recourse you may have.

Many companies use confidentiality agreements when hiring new employees. A confidentiality agreement typically includes an explicit clause stating that an employee who breaches the confidentiality agreement will be terminated.

Employment contracts also often authorize termination for the unauthorized disclosure of confidential information. Thus, termination may be a viable option.

Sometimes, however, termination of the employee may not be sufficient to repair the damage that resulted from their breach. In certain cases, employees who commit confidentiality breaches and harm their employer may be responsible for any loss of revenue that results from the breach. 

 Some important steps to take after a company has discovered a potential breach of confidentiality include the following: 

• Quickly ascertain the scope and nature of the breach;

• Implement measures to prevent further data loss;

• Evaluate the potential impact on affected parties;

• Inform individuals and entities whose information may be compromised;

• Report the breach to relevant regulatory bodies as required;

• Determine the cause and improve security measures;

• Revise data protection policies and procedures; and

• Offer assistance to those affected, including credit monitoring if necessary.

If you have questions about whether your business may have a legal claim against an employee for a breach of confidentiality, contact an experienced employment law attorney today.

How Can a Lawyer Help with Breach of Confidentiality Issues?

The right contract lawyer can play a crucial role in assisting organizations with breach of confidentiality cases, providing both immediate and long-term support. The BrewerLong team can guide employers through the legal requirements for addressing the breach.

We can advise you on whether a notification is necessary, and we can help you decide on the content of notifications to affected individuals and regulatory bodies. This information and these actions could help your company avoid potential fines and sanctions.

In cases where the breach leads to litigation, we can represent your interests in court, defending against lawsuits from affected parties. By developing a robust legal strategy, presenting evidence, and arguing on your behalf, we can help minimize liability and potential damages.

Overall, a lawyer provides comprehensive legal support and strategic advice, enabling employers to navigate the complexities of confidentiality breaches effectively to protect their business interests.

Contact BrewerLong Today

In all business industries, protecting the private information of your clients, your employees, and your company is paramount. A failure to do so can result in severe reputational and monetary consequences, employment terminations, and even lawsuits.

Dealing with workplace confidentiality violations can be overwhelming. But there are ways you may be able to mitigate the effects and take action to recover.

At BrewerLong, we have the experience and sophistication necessary to get you through any business-related legal needs that come your way. Our firm has been serving clients for nearly a decade, and we hope we’ll have the opportunity to help you too. 

Contact us today for a consultation to discuss your case.

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