Are Your Employees Leaking Confidential Information?

As a business leader or manager, one of your worst nightmares may be an employee leaking confidential information. Whether it's a trade secret, sensitive customer data or internal company information, the consequences of a data breach can be devastating for your business. Not only can it result in a loss of revenue and reputation, but it can also lead to legal action and damage to your company's image.

In this article, we'll explore the consequences of leaking confidential data and the steps you can take to address the situation and protect your business from further harm.

The consequences of leaked confidential data

Confidential data can be a company’s most valuable asset, whether this is customer data, trade secrets or future developments which will bring significant updates once introduced. Data leaks, however small, can affect a company’s bottom line and reduce customer confidence in the security of the business. This can lead to serious financial losses, reputational damage and legal repercussions. Customers may also lose confidence in the affected company, leading to a loss of business and revenue.

Additionally, under the recent EU data protection changes, a leak of personal data can result in a costly penalty for the organization.

How employers can maintain legal compliance

Employees are legally obliged to not share their employer’s confidential data, even if this obligation isn’t expressly included within the employee’s contractual documentation. It's often useful to include such an express term so that employees are reminded of this obligation when they join the company, and this term can be referred back to when necessary.

Confidentiality clauses are also important to include as post-termination covenants because, after employment ends, the confidentiality duty only applies to information that could be classed as a trade secret. Therefore, post-termination restrictions will need to be expressly included in contracts to protect a broader range of information after employment ends.

How to protect your data and fix confidential data leaks

Where careless data leaks are identified, usually through email errors such as attaching the wrong document or emailing an unintended recipient, employers should consider how they can address this.

1. Train your employees

Data leaks can be taking place in your business through a variety of methods, for example, data may be intentionally leaked by staff or leaked through careless behavior, and for instance, a reminder of the importance of securely emailing data will help address this. Alternatively, employees may require training on email software systems to ensure they understand how to use these properly.

Moreover, it's recommended to provide regular training to staff regarding safe IT practices and to remind them of their confidentiality obligations and best practices. For instance, you can give training sessions to teach individuals how to identify malicious websites or scams and offer practical advice to ensure that confidentiality obligations are not inadvertently violated.

Educating your staff on best practices can reduce the risk of unintentional cybersecurity breaches and information leaks, which often occur innocently rather than maliciously. What's more, training your staff should also cover areas such as careless talk, email use, data protection obligations and confidentiality outside of the workplace.

2. Restrict access

Proper controls such as passwords, firewalls and encryption are crucial for digital information security. It's important for passwords used for accessing information to be secure and changed regularly. Employees should be educated on the importance of using secure passwords and keeping confidential information protected.

Your employees should also have access to a password manager on their work computer where they can store their passwords digitally to avoid writing them on paper, which could increase the chances of confidential information being leaked. Moreover, ensure that you enable two-factor authentication in your business to make sure that only employees who have access to the codes can retrieve sensitive information.

3. Control and surveillance

To ensure the protection of confidential information, it's recommended to implement secure IT systems and monitor employee behavior. Also, establish a system to monitor staff internet usage and create alerts for unsecured website access or USB inputs to help identify where leaks are taking place. Moreover,

To avoid breaching privacy rights, employees will need to be informed of how monitoring will take place, in advance of this occurring. Where the business is aware there is an unidentified data leak, they may wish to consider whether a confidential reporting line can be introduced to encourage internal reporting.

It's crucial for employers to be aware of the varying state laws on workplace surveillance and IT system monitoring before implementing any such measures.

What to do when your employee is leaking confidential data

Should it be discovered that an employee is intentionally leaking confidential data about your company, this needs to be addressed, without delay, through the formal disciplinary policy. Dependent on the circumstances, intentionally leaking data may be considered serious or gross misconduct by the employer.

A reasonable investigation into the allegations will need to be conducted, with further consideration as to whether disciplinary action or suspension of the employee is necessary to prevent further data leaks or if other measures to temporarily restrict access can be introduced. Once a formal disciplinary hearing has been conducted, a disciplinary sanction that is reasonable in all circumstances can be imposed. Not only will this help prevent the particular employee from leaking data in the future, but it will also deter others from carrying out a similar action.

If there is suspicion of an employee leaking confidential client information, it should be addressed as a priority. Immediate action should be taken to investigate the matter and determine:

• If any sensitive information was disclosed.
• The scope of the leak.
• The nature of the conduct, whether intentional or accidental, is under consideration.

This will also help prevent the same employees from leaking sensitive documents and information of future customers.