Are Confidentiality Agreements Enforceable?

Sep 4th 09
By Benjamin Maltby, MatrixLloyd

It’s common to have a clause in a contract of employment requiring a crewmember to keep certain details about the yacht, owner, guests, behaviour, etc, confidential – but are these agreements enforceable?

Let’s look at this situation under English law, since it – or usually a law that’s very similar – governs most superyacht employment contracts. All employees owe an implied duty of good faith to their employers – even if this isn’t specifically written into their employment contracts or if they are foolish enough to be working without written agreements. This duty will normally include an “obligation of confidence” (confidentiality).

Where the duty is expressed, the onus is on the employer to define the exact nature and extent of the confidential information – otherwise any active steps to prevent disclosure could constitute harassment or oppression of the crewmember.

Although the agreement is only between the employer and crewmember – the duty usually will apply to the identity and behaviour of the beneficial owner and guests, as tending to their needs is an integral part of one’s employment.

The employee’s obligation of confidence may continue long after the employment has been terminated. For example, a worldwide ban on disclosing confidential information about the private lives of employers will be upheld, as long as it does not restrict the future employment of the former employee. In one court case from 1990 with obvious parallels for superyacht crewmembers, the former employee of a royal household, who published a book disclosing confidential information about the royal family, was held to be in breach of his employment contract for doing so.

While there’s a limit to the protection an employer can seek after a crewmember’s employment has finished, fuller protection can be sought whilst the employment is ongoing – and the courts will uphold this. A good example might be requiring crewmembers not to disclose the yacht’s intended movements – for reasons of security and/or privacy.

In some cases, when taken to court by an employer, a possible defence may be that what was disclosed was in the public interest – which could apply to the disclosure of criminal acts or acts of “iniquity” by the employer. A warning here, however: Not everything that is interesting to the public may be disclosed in the public interest.

The law protects employees acting as “whistleblowers” where, in the reasonable belief the crewmember making the disclosure:

  • -A criminal offence has been committed, is being committed or is likely to be committed
  • -Someone has failed, is failing or is likely to fail to comply with any legal obligation to which he or she is subject
  • -A miscarriage of justice has occurred, is occurring or is likely to occur
  • -The health or safety of any individual has been, is being or is likely to be endangered
  • -The environment has been, is being or is likely to be damaged
  • -Information demonstrating any of the above has been, or is likely to be, deliberately concealed

    It will be no defence, however, if the crewmember only discloses negligence or incompetence (as distinct from misconduct).

    Interestingly, it’s not a one-way street: An employer may also owe obligations of confidence to an employee. This may be crucial where the yacht has been involved in, say, a grounding, and aspersions are cast on a particular crewmember – although the employer would have to be bound by any request for a statement by any official accident investigation inquiry.

    Benjamin Maltby is a lawyer with Palma-based consultants MatrixLloyd, providing impartial guidance on all aspects of yacht employment. He began his career as a lawyer with an International Group P&I Club. Contact him at info@matrixlloyd.com.

This article does not provide, or replace, legal advice.

Related Topics:

Poll: Crew Confidentiality

Dos & Don’ts for Handling Famous Guests

Crew Confidential?

Crew Contracts: Read the Fine Print

 






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