Updated October 8,2020:

Information that should be kept confidential includes any information that could damage a company's reputation or ability to do business if that information becomes public. Such information is proprietary or sensitive in nature.

Broadly speaking, confidential information is information that is privileged, classified, or the kind of specific information that must not be disclosed.

Confidential Business Information

Every business has information it considers confidential. Such information often pertains to either the business itself or the company's employees.

Confidential information about the business includes but is not limited to:

  • Trade secrets.
  • Business processes.
  • Business operations.
  • Inventory details.
  • Customers or clients.
  • Revenue sources.
  • Expenditures and losses.

If you want your customer, client, and employee relations to be characterized by trust, you have to respect confidentiality in your workplace. When clients and employees know you will respect confidentiality, this allows for open and candid communication.

Confidential Employee Information

Businesses usually do a good job of keeping client information private, but this is not always true of employee information. As an employer, if you want your staff to value client and customer information, you need to show the same regard for employee information.

Confidential employee personal and professional information includes but is not limited to:

  • Personal data: Social Security Number, date of birth, marital status, and mailing address.
  • Job application data: resume, background checks, and interview notes.
  • Employment information: employment contract, pay rate, bonuses, and benefits.
  • Job performance data: performance reviews, warnings, and disciplinary notes.
  • Administrative information: time sheets, pay stubs, direct deposit forms, and tax forms.
  • Job termination data: the employee's resignation letter, termination records, and unemployment insurance claims.

Only grant those with the need to know access to this information. Few people beyond your Human Resources department should have access to confidential employee information. If this kind of employee data becomes public, it could lead to discrimination and a potentially hostile working environment. It could also damage trust between employees and the company.

Handling Digital Data

Confidentiality also applies to digital data in the form of online information, applications, databases, and servers. Work with your Information Technology staff to make sure all servers are secure and the data on them is protected. These measures will help maintain employee privacy as well as protect the company from potential legal action and fines.

Utilize email tools that let you encrypt messages so only the intended recipients can open them. This will prevent unintended recipients from reading confidential information.

You also need to work with your Information Technology staff to make sure you have in place appropriate firewalls, password protection, and encryption. These will help keep data safe and prevent unauthorized access or transmission.

Keep your security systems simple. The more complex your security, the less likely it is employees will use it at all or use it correctly. Before rolling out security tools, conduct user testing. Create a test group from your employees and survey them to find out how well the tools perform. They will tell you how easy and effective they are to use.

Employee Education

If you do not have a privacy policy for your company, develop one. Then communicate that policy to your employees, managers, and supervisors. Provide hard copies of the policy to your staff and conduct regular training on confidentiality and its importance.

Not all leaks of confidential information are intentional. This is why it is important to train your employees to recognize confidential information. They should also know what constitutes a breach of confidentiality. Spell out the consequences employees face for violating the privacy policy.

Also, make sure your employee training includes what information each employee can access. Emphasize the importance of keeping that information from unauthorized personnel. The consequences for breaking that confidentially could include dismissal depending on the severity of the offense. Employees should also refrain from discussing client business outside of work.

Update your privacy policy regularly to take new government legislation into account. Communicate changes to your employees promptly so that they remain compliant.

Developing and enforcing a high standard of confidentiality in the workplace protects your business from legal challenges. It also provides your employees with a safe and secure work environment which leads to greater productivity.

If you need help with information that should be kept confidential, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.