Information leakage can cause serious damage to business, so commercial companies take all possible measures to prevent it, including entering into non-disclosure agreements with their counterparties and employees, as well as business owners. Let's talk about how to make the NDA a truly working tool.
What is the NDA and what is its legal nature in Russian law?
An NDA is a non-disclosure agreement that a company enters into with those to whom it transfers information that is material to the business in order to prevent further disclosure.
When developing NDA and implementing its practice in the business life of the company, the first question to be answered is what sources of information may be leaked through.
The answer is obvious: commercially interesting information can be disclosed by those who have access to it and want to profit from it or with its help to harm the company. These are offended or underestimated employees, unscrupulous contractors and business owners who, for example, once established a joint venture company, and then for some reason actually withdrew from business in it and engage in other projects, especially if these other projects are implemented in the same market.
When it comes to participants (shareholders) in commercial companies, NDA is governed by corporate law.
According to paragraph 1 of Article 65.1 of the Civil Code of the Russian Federation, members of the corporation have the right to receive information about the activities of the corporation and to get acquainted with its accounting and other documentation.
According to item 5 of article 50 of the Federal law from February, 8th, 1998 N 14-FZ "About societies with limited liability", item 12 of article 91 of the Federal law from December, 26th, 1995 N 208-FZ "About joint-stock companies" the information is given after signing between a society and the participant (shareholder) of the contract on non-proliferation of the information (confidentiality agreement).
The agreement is concluded in the form accepted in the company, in the case of joint-stock companies there is a separate requirement that the terms and conditions of the agreement must be placed on the Internet site and be the same for all shareholders.
The agreement with employees is subject to the norms of labor legislation. According to Article 57 of the Russian Labor Code, an employment contract may provide for a condition of non-disclosure of legally protected secrets (state, official, commercial, etc.), and this condition may not worsen the position of an employee as compared to labor legislation (also Article 9 of the Russian Labor Code).
As for counterparties, i.e. persons with whom the company works under civil law contracts, whether natural or legal person, it is obvious that the NDA concluded with them is a civil law contract.
Due to the fact that as a separate type of obligation in Part 2 of the Civil Code of the Russian Federation the non-disclosure agreement is not named, the general rules on the contract apply to it: according to Part 2 of Art. 421 of the Civil Code of the Russian Federation, the parties may enter into a contract, either provided for or not provided for by law or other legal acts.
How does NDA work in Russian legal reality
Under Russian law, the NDA, regardless of whether it is a party (founder (shareholder, participant), employee or counterparty), will only be fully operational if all legal formalities are met.
According to subclause 7 of clause 7. 3 item 2 of the Federal law from July, 27th, 2006 N 149-FZ "About the information, information technologies and about information protection" confidentiality of the information is obligatory for performance by the person who has received access to the certain information, requirement not to transfer such information to the third parties without the consent of its owner.
By virtue of part 4 of Article 9 of the Law N 149-FZ, the conditions for attributing information to information constituting a secret, the mandatory confidentiality of such information, as well as liability for its disclosure are established by federal laws.
The regime of confidentiality of information allowing commercial profit and maintaining a stable position in the market is regulated by Federal Law No. 98-FZ "On Commercial Secrets" dated July 29, 2004.
By virtue of Clause 2, Article 3 of the Law No. 98-FZ, commercial secrets may include any information that has actual or potential commercial value due to its being unknown to third parties to which third parties do not have free access on a legal basis.
Exceptions to this rule are established in Art. 5 of the Law, which defines the list of information that cannot be classified as a commercial secret, but from this information you do not really get any special benefit.
In order to establish a trade secret regime, it is necessary to fulfill the requirements of part 1 of Article 10 of the Trade Secret Act:
1) to determine the list of information constituting commercial secrets;
2) to establish the order of treatment with the information constituting a trade secret and control over its observance, i.e. to limit access to trade secret;
3) to keep a record of persons who received access to a commercial secret, as well as persons to whom it was provided (in the case of state and municipal bodies) or transferred (in relation to counterparties);
4) to enter into employment contracts with employees into contracts with counterparties the conditions governing the use of commercial secrets;
5) to put on material carriers of commercial secret (or to include in the details of documents) the mark "Commercial secret" with indication of the owner of such information.
It is necessary to notice that according to GOST R 7.0.97-2016 to put on a material carrier and to include in details of the document it, as a matter of fact, the same: according to item 4, item 5.14 of GOST the flap of restriction of access is a detail of the document and is put in the right top corner of the first sheet on border of the top field.
According to part 2 of Article 10 of the Law on Commercial Secrets, the regime of commercial secrets is considered to be established only after the above measures are taken, and failure to comply with the requirements of the law entails the refusal of the courts to meet the requirements associated with the disclosure of information, as was, for example, in cases A40-83833/15-15, A33-28905/2016.
Responsibility for disclosure of information classified as commercial secret
The agreement on confidentiality of the information in conditions of the established trade secret regime gives to the owner of the information significant from the commercial point of view effective legal tools for protection, especially for prevention of infringements as the person warned about serious consequences hardly will dare to try to disclose someone else's trade secret.
If the employee has disclosed it:
1) Firing according to item "c" p. 6 h. 1. Article 81 of the Labour Code of the Russian Federation: an employment contract may be terminated by the employer in case of disclosure of a legally protected secret, including a commercial secret, which has become known to the employee in connection with the performance of his work duties.
For example, the decision of the Prikubansky District Court of Krasnodar of 16.10.2018 in case No. 2-10607/18 confirmed the validity of the dismissal under the article of the employee who sent a report for six months of work to the company Tander (the same shops "Magnet") with information on revenue, sales, cost of goods and trade markup, bonuses suppliers and other financial information to non-corporate e-mail with the note "more evidence".
The decision of the Starooskolsk city court from 20.02.2017 in case 2-845/2017 denied the illegal dismissal of the manager who sent an e-mail to a third legal entity information about the conditions of the distribution relationship with the client of the company.
And there are a lot of such examples.
2) Administrative liability under Art. 13.14 of the Administrative Code of the Russian Federation with the imposition of a fine on citizens in the amount of five hundred to one thousand rubles, and on officials - from four thousand to five thousand rubles.
3) Criminal liability under part 2 of article 183 of the Criminal Code of the Russian Federation with assignment of the penalty at the rate of up to one million roubles or at the rate of the income for the period up to two years with deprivation of the right to occupy certain posts or to be engaged in certain activity for the period up to three years, or correctional works for the period up to two years, or compulsory works for the period up to three years, or imprisonment for the same period.
4) Loss recovery: according to paragraph 7 of Article 243 of the Labour Code of the Russian Federation, if an employee discloses information that constitutes a legally protected secret, including commercial information, he or she shall bear material responsibility in the full amount of the damage caused.
It should be taken into account that liability in the form of a penalty is prohibited to include in the agreement with the employee by law, and even if it is included, it will not be possible to recover it, plus there is a risk of incurring administrative liability under Art. 5.27 of the Code of Administrative Offences of the Russian Federation for violation of the labor legislation.
For example, in the Court of Appeal ruling of June 24, 2019 in case N 33-26791/2019, the Civil Court of the Moscow City Court recognized an additional condition included in the employment contract in the form of recovery of a fine for violation of conditions of confidentiality in the amount of 500,000 rubles contrary to current labor legislation and not subject to application.
If the counterparty disclosed: administrative liability for unfair competition under Art. 14.33 of the Administrative Code of the Russian Federation with the imposition of an administrative fine on officials in the amount of twelve thousand to twenty thousand rubles; on legal entities - from one hundred thousand to five hundred thousand rubles.
If the participant (shareholder) disclosed: exclusion from the company.
According to paragraph 1 of Art. 67 of the Civil Code of the Russian Federation, participants in business partnerships and companies (except for PAO) have the right to demand the exclusion of another participant from the partnership or company in court, if such participant by his actions (omissions) caused significant damage to the partnership or company or otherwise significantly hinders its activities and the achievement of the goals for which it was created, including grossly violating its obligations under the law or the constituent documents of the partnership or company.
The Law on Limited Liability Companies reproduces this provision in Article 10 of the Law.
The Arbitration Court of the Novosibirsk Region in its decision dated 10.05.2017 in case No. A45-2106/2017 indicated that failure of a company member to comply with its obligation not to disclose confidential information about the company's activities may be the basis for civil liability measures, up to and including exclusion from the company's membership.
In addition, the disclosure of confidential information by the counterparty or the owner may always lead to recovery of damages caused by disclosure and a penalty, provided that such a contractual condition exists.
In this case, the actual contractual penalty will be the easiest in terms of proof and the most frightening option.
By the way, a properly established regime of trade secrets will not allow the use of illegally obtained confidential information as evidence in court (Part 3 of Art. 64 of the Russian Federation, Part 2 of Art. 55 of the Civil Code), which is another argument in his favor.
If the NDA agreement is not in compliance with the Trade Secrets Act or has not been concluded at all
Let us immediately stipulate that in the absence of a properly established trade secret regime it is simply impossible to bring an employee to any liability, it is always possible to fight with a member of a LLC or a shareholder of a JSC with the general rules on the difficulty of the corporation, so all the following will apply only to counterparties.
By virtue of part 2 of article 421 of the Civil Code of the Russian Federation participants of civil law turnover can conclude absolutely any agreements not contradicting the legislation, including those imposing on the parties to observe confidentiality of the transferred information.
According to item 309 of the Civil code of the Russian Federation obligations should be executed properly according to conditions of obligations and requirements of the law, other legal acts, and in the absence of such conditions and requirements - according to customs or other usually presented requirements.
According to paragraph 1 of Article 393 of the Civil Code of the Russian Federation, the debtor is obliged to reimburse the creditor for the losses caused by the non-fulfillment or improper fulfillment of the obligation, including real damage and loss of profit (Article 15 of the Civil Code).
Thus, the party to the contract that has violated the confidentiality agreement, even in the absence of liability measures in the contract may be obliged to reimburse the other party for losses caused by disclosure, misuse of information and the like, if, of course, it is possible to pass the procedure of proving.
Loss cases are rightly considered one of the most difficult. It is well known and repeatedly emphasized by the courts that the subject of proving losses includes four elements in aggregate:
The fact that the plaintiff's right has been violated;
the defendant's fault for the violation of the plaintiff's right;
the fact of causing the losses and their amount;
causal connection between the fact of the violation of the right and the inflicted losses.
Thus, it will be necessary to prove the fact of distribution of confidential information, the guilt of the counterparty in distribution of information, the reality of the incurred losses and their amount, and that the losses arose precisely because of the disclosure of information.
Failure to prove at least one of the mentioned elements will unambiguously result in the refusal of the court to satisfy the claim for recovery of losses.
For this reason, it is unreasonable to simply declare in the contract a duty not to disclose confidential information.
It is necessary to provide for a penalty, the recovery of which does not involve proving the losses by virtue of the direct instruction of Art. 330 of the Civil Code (the subject of proof in cases of collection of penalties is limited to the fact of breach of obligations).
For example, by the Resolution of the Ninth Arbitration Court of Appeal dated June 6, 2016. N 09AP-13810/16 in case A40-220083/15 was left unchanged the decision of the court of first instance to recover a fine for the disclosure of confidential information.
The case was as follows: the two companies entered into a supply agreement on the condition that any information contained in the contract and in any documents related to its execution is considered confidential, and the parties undertake not to disclose it under threat of a fine of 20% of the transaction amount.
However, the seller subsequently entered into an assignment contract with a third party and handed over the delivery contract and the delivery notes to the third party, for which it was fined.
It is interesting to note that 20% of the deal amounted to 16.5 million rubles, of which the court satisfied only 2 million (exorbitant fines in NDA - a common story, and the court will not satisfy the huge fine, because it is more like a source of income (paragraph 2 of Art. 333 of the Civil Code).
Another example: case No. A56-92673/2016, which resulted in a fine of 400,000 rubles from the person who disclosed confidential information (in this case, the court levied as much as was prescribed in the contract, because it is obvious that the amount for the commercial companies involved in the case is normal).
In addition, it is possible to use a relatively new for Russian law civil law institution of compensation for losses, established by Art. 406.1 of the Civil Code: "The parties of the obligation, acting at performance of their business activity, can provide by the agreement the obligation of one party to indemnify property losses of the other party which have arisen in case of occurrence of circumstances defined in such agreement and not connected with infringement of obligation by its party".
In this case, the subject matter of proof will be: the occurrence of circumstances specified in the agreement, the onset of losses or the inevitability of their occurrence in the future and the causal relationship between the circumstances and losses (paragraph 15 of the Resolution of the Plenum of the Supreme Court of the Russian Federation dated March 24, 2016 N 7).
Including such a condition in the agreement, it is necessary to ensure that the fine line between the institute of compensation for losses and the institute of insurance does not cross.
The main distinguishing feature of the indemnity clause is the secondary nature of the underlying agreement that it accompanies, therefore, the agreement should show that the acceptance by one of the parties of certain risks normally corresponds to the underlying obligation of market relations.
If an agreement on non-disclosure of information between the parties has not been concluded in any form, the parties remain to count on the favor of the court and the general rules on good faith of the parties to civil law relations and the prohibition to take advantage of bad faith (paragraphs 3, 4 of Article 1 of the Civil Code), but the chance of winning in court is extremely negligible.
At the same time, there are a number of rules allowing to protect your confidential information regardless of the conclusion of a special agreement and the establishment of a commercial secret regime:
1) According to clause 4 of Article 67.2 of the Civil Code of the Russian Federation, unless otherwise stipulated by law, information on the content of a corporate agreement concluded by the participants of a non-public company shall not be disclosed and shall be confidential.
2) In accordance with sub-clause 4 of Article 434.1 of the Civil Code of the Russian Federation, if in the course of negotiations on entering into a contract a party receives information which is transmitted to it by the other party as confidential, it shall not disclose this information and shall not use it improperly for its purposes regardless of whether the contract is concluded. In the event of breach of this duty, it shall indemnify the other party for loss incurred as a result of the disclosure of the confidential information or its use for its own purposes.
However, in order to use this article, the transfer of information as confidential would still have to be documented, even if not necessarily in a meaningful agreement.
3) Information on new decisions and technical knowledge obtained by the parties under the contract (Article 727 of the Civil Code of the Russian Federation): if a party, due to fulfillment of its obligation under the contract, received information from the other party on new decisions and technical knowledge, including information not protected by law, the party that received such information is not entitled to disclose it to the third parties without consent of the other party.
4) Information relating to contracts for the performance of research work, experimental design and technological work (Part 1 of Article 771 of the Civil Code): unless otherwise provided by contracts for the performance of research work, experimental design and technological work, the parties are obliged to ensure confidentiality of information relating to the subject matter of the contract, the progress of its implementation and the results obtained.