The Labour Code of Lithuania allows an employer and an employee to enter into an agreement on the protection of confidential information and to agree on what information is considered confidential and how it must be protected.
The Labour Code provides that the parties to an employment contract may agree that, during the employment relationship and after its termination, the employee will not use for personal or commercial purposes or disclose to third parties certain information obtained from the employer or through the performance of work functions, which the parties to the employment contract identify as confidential in their confidentiality agreement.
The Labour Code also stipulates that a confidentiality agreement must define:the data constituting confidential information, the duration of the confidentiality agreement, the employer’s obligations in assisting the employee in preserving the confidentiality of such information.
The parties to the employment contract may also agree on penalties for non-performance or improper performance of the confidentiality agreement.
In addition, the Labour Code provides that a confidentiality agreement remains valid for one year after the termination of employment relations, unless the parties agree on a longer period.
Therefore, such an agreement may include fines (penalties) for the disclosure of confidential information. Penalties may be established as a fixed monetary amount or linked to the employee’s salary, for example, an amount equivalent to six months’ salary.
Confidentiality agreements may be concluded with employees holding managerial positions, as well as with employees whose duties are related to sales and customer acquisition.
It is also important to note that a breach of confidentiality may be considered a gross violation of employment duties. However, the circumstances of each individual case should be assessed (the employee’s fault, the severity of the violation, and its negative consequences). In such a case, the company may have stronger grounds to dismiss an employee who has breached these obligations.
Attorney at law Giedrius Abromavicius