Question 146. Proving the material damage of an enterprise when an Employee discloses confidential information on the media and social network (such as property, prestige, revenue/profits, costs, etc.) to apply the appropriate form of the labour discipline is often very difficult because damage may be of a mental nature such as reputation and brand of the enterprise and the Employer cannot quantify the extent of such damage in terms of monetary value or prove the existence of such damage. What should the Employer do in these cases?

Answer:

1. Is an Employer required to prove any material damage when an Employee discloses the enterprise’s confidential information on the media and social network?

First, it should be made clear that the term “confidential information” is not currently covered or explained in the Labour Code and its written guidelines on implementation. Article 126.2 of the Labour Code only refers to the term “business secret, technological secret”, which is defined as one of the cases where the Employer has the right to impose the disciplinary form of dismissal on any Employee who “discloses the business secrets and technological secrets of the Employer”. Therefore, in order to avoid risks to the Employer with regard to explaining the term “confidential information” as well as providing the Employer with a reasonable legal basis to discipline the Employee for the act of disclosure of confidential information, the Employer should first define the concept of confidential information as part of business secrets or technology secrets. In such a case, if the Employee discloses confidential information (which is considered part of any business secret or technological secret), the Employer will have the legal ground to apply the disciplinary form of dismissal against the breached Employee.

The legal question is whether in case of the Employee’ disclosure of the business secrets and technology secrets, the Employer is required to prove that the Employer has suffered material damage to provide a basis for imposing a particular form of discipline on the Employee. The answer is No. Article 125.2 of the Labour Code regulating the violation of “business and technological secret disclosure” actually only covers offences by the Employee without providing the condition that the Employer must suffer physical damage from these violations. This means that the Employer has no obligation to prove that any material damage the Employer has suffered results from the Employee’s violation. Determining any actual damage, if any, aims to define the Employee’s material liability to the Employer.

Therefore, the Employer, when elaborating the ILR, should not be self-binding upon additional obligations that the enterprises must prove its material damage due to the breaching disclosure of “business secrets and technology secrets” by the Employee. In other words, the Employer merely stipulates the Employee’s obligation to maintain the “business secret and technological secret” of the enterprise in the ILR. Then, if Employer has solid legal grounds to prove the said violation by the Employee, the Employer may impose labour discipline against the Employee as prescribed without the need to prove that the Employer suffers actual damages from the Employee’ violations.