The Law Of Confidence In Malaysia

• Published date: 17 August 2022
• Law Firm: Azmi & Associates
• Author: Ms Melinda D'Angelus and Vanessa Iskandar Ng

Every employee owes a duty of good faith or fidelity to his employer which requires that he does not use or disclose any confidential information gained in the course of his employment without the employer's consent. The company's confidential information is important as it allows the company to compete with its competitors. If the said confidential information is exposed to a third party, it will weaken the company's competing powers against its competitors and subsequently cause huge loss to the company.¹ It has to be noted that the duty of confidentiality extends even after the employment contract ends.²

The courts have held that what makes the information confidential is the fact that the maker of the document has used his brain and thus produced a result which can only be produced by somebody who goes through the same process. Hence, when the recipient of the information makes use of the information, he avoids from doing the work and saves himself the time and trouble of having to do the work notwithstanding the fact that he is capable of doing it.³

An employee's obligation of confidence applies to his employer's trade secrets⁴ such as manufacturing processes, secret formula, cost prices, quoted prices, specific needs and requirements of the customers and suppliers, status of all on-going negotiations with the customers, and price list.⁵

However, it has to be borne in mind that not all information will be classified as confidential. A former...