The definition of a business secret does not encompass the experience and competence acquired by employees in the normal course of their professional career provided that they have been honest. This is thus recognised in article 1.3 of the Business Secrets Act 1/2019 of 20th February (“BSA”) when it expresses that the law may not serve as a basis to justify the limitations of its use. Likewise, this is supported by Preamble II of the Act which establishes that the concept of business secret does not cover the “experience and the competence acquired by employees during the normal course of their professional career”.
The background of professional knowledge and competence is one of the main assets of an employee for their promotion and a very relevant aspect for the entrepreneur when looking for human resources. It is not just a principle of general knowledge regarding a certain sector or industry in which employees carry out their services, it consists of other such knowledge which may be considered specific or particular, linked to learning, the study and practice acquired during a career, given that this is where the main added value lies. It is plain that such specific knowledge is what is most appreciated by the competition and is what, in many cases, motivates the launch of job offers to employees, and particularly to specialised workers. The offeror expects and relies on the employee moving from a competitor company to emerge and make available their professional skills, which is taken for granted, but also expects to receive implicitly, the specific knowledge acquired during the employee’s previous professional phases.
In this overview, we shall focus on premises wherein the business secret is revealed subsequently to the termination or resignation of the employee in a company and the ensuing communication or use in a competing company.
A specialised employee normally has access to business secrets for the purpose of their use during the rendering of their services, without the disclosure of which he or she would not be able to perform the entrusted tasks. It is certainly true that the BSA allows the employee to benefit from professional experience and the technical knowledge obtained during his or her career, but this does not equate to open permission to reveal or use the business secret outside the scope of the company which communicated it.
This leads to the question of whether the business secret, once internalised and assimilated by the employee as a form of work and professional reasoning, may become the object of protection when the employee leaves the company where it was acquired and uses it in the new job position. More specifically, we refer to cases where the integration of secret information with the professional knowledge and skills of the worker acquired in the honest performance of his or her functions, thus forming an indissoluble whole. Up until the enactment of the BSA, the commercial courts have tended to present this question by contrasting what constitutes a business secret in the sense that it exceeds an acquired skill and may not be reproduced in an identical form based upon the memory or capacities of the employee, against what constitutes the mere knowledge and experience of the employee. Consequently, with this approach, the basic element which distinguishes the legitimate use of the business secret from the illegitimate use thereof will consist of seeing whether this knowledge has been absorbed, internalised or embedded in the intellectual framework of the employee, without the need to resort to support for its use in document or any other form. It seems that the paradigm is the following: only when there is a flow of integration of the business secret into the worker’s skills does the use of this information fall outside the protective measures of the BSA.
Notwithstanding the foregoing, this formula seems to be too general a rule and not sufficient for solving the problem of the conflict between the confidentiality of the business secret and the right of the employee to use it when it forms part of their acquired skills or competences. Each case must be considered in view of the circumstances that surround it. For example, think of business secrets regarding productive processes thanks to which a certain product is manufactured in less time and with a low rate of defects. This type of knowledge is not protected under industrial property rights; its essence lies in the practice and the accumulation of continued improvement in the process until a different and secret method is attained which grants a competitive advantage. The company trusts the secret to the worker so that they may render their services, taking for granted the loyalty of the worker. Therefore, if the worker incorporates this knowledge into his or her professional repertory in a natural and honest manner, and after some time becomes an employee of a competitor where the secret is disclosed and used, this may be considered a legitimate use, given that the experience and knowledge have naturally absorbed the business secret, and they become one and the same.
However, from the point of view of the objective consequences of such conduct, they are serious, insofar as the new employer comes to have knowledge of said secret, and in applying it, the competitive advantage enjoyed by the previous employer company is removed. In our opinion, a complete and weighted evaluation of the case must take into account, as well as the possible integration of the business secrets into the knowledge and experience of the worker, other circumstances which bring to light the intentionality of the worker, such as the amount of time working at the previous company, the possible contacts that the employee may have had in the past with the new employer, the motive of the new contract; it will also be necessary to consider whether this secret is real and reasonably integrated into the worker’s skills or whether because of its characteristics, the application of the secret requires the use of information, data or additional documentation, which goes beyond the mere use of knowledge integrated into the intellectual background of the worker. On the other hand, the BSA would betray its very purpose if it were not applicable to cases where the worker used the business secret as the main bargaining chip for professional promotion; that is to say, the worker accesses the secret in the knowledge that the intention is to leave the company when he or she has “assimilated” it. The intentionality of the receiving subject of the business secret is an element that cannot be forgotten. Obtaining a business secret shall be conferred with legitimacy only when good faith is present, in such a way that if the worker appears to act with loyalty, but with the hidden intention of making the secret their own and disclosing the secret later on, it may be deemed that this acquisition is illegitimate, as it is flawed at source and therefore the theory of integration of the secret into the skills of the worker must not be applicable at all as we must not forget that article 1.3 of the BSA conditions the legality of obtaining experience and competences with the honest way in which they are acquired.
An effective protection of the business secret has a lot to do with the preventative measures which may be adopted, among which is the establishment of acts of safeguarding confidentiality and restricted use, during and subsequent to the validity of an employment contract. Article 3.2 of the BSA refers to the above and deems the disclosure of a business secret illegal in breach of a confidentiality agreement or any another non-disclosure obligation. These agreements must be articulated preferably before the initiation of the employment relationship, but when the business secrets arise or are disclosed subsequent to incorporation into the company, the modification of the labour contract would be wise before proceeding with the disclosure of the business secrets, and when this is not possible, to do so as soon as it is possible. The absence of this type of agreement may be interpreted as a lack of diligence on the part of the company in the protection of business secrets and also may cast doubts upon the importance of this information or regarding its true condition as a business secret.
Eduardo Vilá
Vilá Abogados
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8th January 2021
