When An Employee Discloses Confidential Information or Makes False Disparaging Remarks About An Employer

This article provides a brief summary as to the basis upon which an employer can terminate an employee’s service in the event the employee commits a breach of confidentiality or makes disparaging remarks about the employer.

In short, and perhaps unsurprisingly, an employer can fire an employee for disclosing confidential
information or for making disparaging remarks about the employer in public.

In a recent Omani Court case, an employer had been notified by a third party about one of its employees who was heard making disparaging remarks about the company in a public place. Moreover, the third party also stated that they had overheard the employee misuse confidential information.

There was a second strand to the dispute, namely, the employee had also failed to maintain and keep important files up-to-date and in proper order, despite the fact that these were key tasks, as per its job description.

After following the steps described in the above article (of which the employee had refused to attend the meeting), the employee was dismissed by the employer, who cited in the termination letter Articles 40(5) and (9) of Omani Labour Law. The employee subsequently filed a claim in the Omani Primary Court for “unfair dismissal.”

As described above, an employer can terminate an employee’s service contract under Article 40(9) for gross misconduct.

Provisions Relating to Breach of Confidential Information

Article 27(4) of the Labour Law clearly states that the worker is bound to keep the secrets of its work. Furthermore, Article 40(5) permits the employer to dismiss the worker without prior notice and without end-of-service gratuity if he discloses any secrets in relation to the establishment in which he works.

However, it is important to note that Article 30 of the Labour Law states that no action can be taken against the employee if 15 days have expired after the date of discovery of the violation without the employer having sent a Letter of Accusation. Furthermore, a disciplinary penalty can only be imposed on the employee within 30 days (for monthly wage workers) of proving the violation.

In the above case, the Court concluded that the employee had failed to fulfill their duties (i.e., failing to maintain and keep important files up-to-date), so the employer was entitled to terminate. Interestingly, in the end, the only issue that was deliberated upon by the Court was the omission of critical work duties by the employee, and not the alleged disclosure of confidential information. This was primarily due to the employer being unable to produce witnesses to prove the same.

It is therefore important to note that, in the Omani Courts, witness testimony is critical to prove an alleged breach of confidentiality. Even if the employer is aware of the exact instances wherein the employee has breached the confidentiality clause, unless the employer is able to prove it by way of witness testimony, it cannot rely upon breach of confidentiality as a justification for dismissal.

Non-Disparagement Clauses

A new trend in some countries is to include, within employment contracts, a Non-Disparagement Clause. This clause restricts individuals from taking any action that negatively impacts upon an organization, its reputation, products, services, management or employees.

A potential standard clause would read:

                   “[During the Term and thereafter,] [Employee] agrees to take no action – both inside and outside the work place - which is intended, or would reasonably be expected, to harm the Company or its reputation or which would reasonably be expected to lead to unwanted or unfavorable publicity for the Company. This obligation is not limited to working hours.”

A breach of this type of clause should entitle the employer to terminate an employee’s service contract under Article 40(9) as explained above.

It is important for an employer to protect its organization with well-drafted, explicit contractual clauses. In addition, at the first sign of trouble, detailed legal advice should be sought.