Most early stage businesses lack financial resources to secure their own premises and consequently, opt for shared office spaces. Here, multiple businesses share a common space (typically open plan), working side-by-side on their computers and collaborating with one another. Shared office spaces are, however, a perfect breeding ground for accidental disclosure of confidential information. This article will explain what constitutes confidential information, how to prove that someone has disclosed your confidential information, and what steps you can take to mitigate the risk of a breach in shared office spaces.
What is Confidential Information?
The definition of confidential information is broad and may include:
- Source code;
- Business models;
- Business plans;
- Operating procedures;
- Financials; and
- Customer and supplier lists.
This information is confidential regardless of whether or not you reduce such information to a tangible form.
From a legal perspective, the law may deem any information confidential if it has the necessary quality of confidence. That means that information must be private in nature and must not be capable of being described as common knowledge.
Proving That There Has Been a Breach of Confidence
A party alleging a breach of confidence must demonstrate the following:
- There existed an obligation to keep the information confidential;
- The information was confidential in nature in the sense that it was private and not common knowledge;
- The disclosure of the confidential information was unauthorised; and
- The disclosure of the confidential information resulted in damages.
Enforcing a breach of confidence is a costly and time-consuming exercise. However, there are practical measures that can be taken to reduce the risk of disclosure (whether it be intentional or inadvertent) in a shared office space. For example:
- Taking calls and having meetings in private spaces;
- Ensuring computers are password protected;
- Storing hardcopy documents in a locked draw or facility;
- Formalising disclosure rights and obligations by way of a confidentiality agreement (known as a non-disclosure agreement).
A confidentiality agreement is a legal contract between two or more parties that outlines the confidential material, knowledge or information that the parties share with each other or may receive as a result of their working arrangements. Its purpose is to restrict the disclosure of confidential information and codify the parties’ rights and obligations.
When drafting a confidentiality agreement for parties using shared office spaces, it’s essential that you draft the agreement in expansive terms. An expansive agreement will make sure that you adequately capture all instances of disclosure and receipt. It is of little to no use to have a confidentiality agreement that is not capable of capturing the relevant modes of informational exchange.
If you would like to have a confidential agreement drafted or reviewed, or if you would like to know more about confidential information itself, get in touch with our commercial lawyers on 1300 544 755.