Confidentiality Clauses and Injunctions
In many areas, confidentiality clauses in employment contracts are crucial to shielding trade secrets. When (former) employees breach post-contractual non-disclosure obligations, employers can, among other things, file for injunctive relief to enforce the clause. A prerequisite for any successful injunction is that the clause itself is valid; otherwise, all related claims will fail.
Sensitive Data E-mailed to Competitors
The case before the BAG concerned the question of whether a contractual confidentiality clause actually obliged an employee to maintain secrecy (judgment of 17 October 2024, 8 AZR 172/23). The employee, significantly involved in product development, e-mailed specific performance data and product details to potential competitors in 2015. He left the company at the end of 2016.
Breach of Confidentiality Clause and the Trade Secrets Act?
When the former employer discovered the 2015 “leak” in 2018, he sued to stop any future disclosure of trade secrets. The claim relied on the contractual confidentiality clause, which obliged the employee to keep all trade secrets and other internal matters confidential for an unlimited period after termination – a classic catch-all clause. The parties also litigated over a statutory claim under the German Trade Secrets Act (Gesetz zum Schutz von Geschäftsgeheimnissen – GeschGehG) and its predecessor in the Unfair Competition Act (UWG).
No Injunctive Relief under the Trade Secrets Act
The BAG denied an injunction under § 6 GeschGehG. Although the Act applies retroactively to disclosures that occurred before it entered into force in 2019, two conditions must be met:
- The disclosure had to be unlawful at the time (e.g., violating the UWG), and
- At the time of the final judgment, the conduct must meet the requirements of a GeschGehG injunction claim.
The employer failed the second test: he could not prove that the information qualified as a “protected trade secret” because it lacked evidence of adequate protective measures (technical safeguards, etc.) required since 2019.
Catch-all Clause Invalid
The BAG also declared the widely used catch-all confidentiality clause void. Because it covered every internal matter and applied indefinitely beyond termination without compensation, it unreasonably restricted the employee’s occupational freedom – effectively acting as an unlawful post-contractual non-compete.
The Court left unclear which contractual clauses it might approve in future. On the one hand, it demands specificity: only clearly identified trade secrets may be protected. On the other, it suggests employers may need a formal post-contractual non-compete under §§ 74 et seq. German Commercial Code (HGB) – including compensation – if they wish to go beyond the statutory protection of the GeschGehG.
How to Protect Trade Secrets Efficiently
The ruling shows that robust trade-secret protection comes with strict requirements. Contractual confidentiality obligations are advisable only if paired with a compensated non-compete – or if they are narrowly drafted to cover defined information or categories. Better even, fulfil the GeschGehG criteria: adjust contract wording accordingly and implement technical and organisational safeguards so that the information truly qualifies as a “protected trade secret.”
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Summary of the keyfacts
- Injunctions under the Trade Secrets Act may still be available for disclosures predating April 2019.
- Employers must demonstrably protect sensitive information with safeguards to claim relief under the Act.
- Catch-all clauses in employment contracts are invalid; use specific confidentiality clauses or a compensated post-contractual non-compete instead.
