When confidential information is leaked, UAE law empowers employers to act swiftly. From obtaining court orders to halt further disclosure to seeking criminal penalties, multiple remedies are available to protect your company’s interests and reputation.
Introduction
In the UAE’s dynamic and competitive market, maintaining confidentiality in the workplace is critical. Sensitive business information – from client databases and pricing strategies to secret recipes and proprietary algorithms – often underpins a company’s competitive edge in the market. A single leak of these “trade secrets” to a rival can erase hard-won advantages overnight. Unfortunately, cases abound of unscrupulous competitors tempting employees to sell their company’s secrets (customer lists, bid details, technical know-how, etc.), causing significant losses to businesses.
In this high-stakes environment, the UAE law recognizes the importance of safeguarding corporate confidentiality. This article seeks to explore what counts as confidential information under UAE law, how it can be protected, and what civil and criminal remedies are available if an employee divulges your company’s secrets. Finally, we will explore proactive steps to prevent breaches and why swift legal action is essential to protect your business.
This blog is a part of our UAE Mainland Litigation , Employment Law Services.
This is also a part of our UAE Federal Labour Law blogpost.
What Constitutes Confidential Information under UAE Law?
No Single Definition, But Broad Protection: UAE law doesn’t offer a single definition of “confidential information,” but protects various non-public business details that give companies an advantage. This includes technical know-how, business plans, client lists, and financial data. If an employer treats certain information as secret and valuable, it’s likely to be legally recognized as confidential. In practice, if you as an employer treat certain information as secret and valuable, the law is likely to treat it as “confidential information” worthy of protection.
Employee Duty of Confidentiality: Under UAE law, employees have a clear legal obligation to safeguard their employer’s confidential information. The UAE Civil Code explicitly requires employees to keep the industrial and trade secrets of their employer even after the employment ends. Likewise, the UAE Labour Law (Federal Decree-Law No. 33 of 2021) reinforces this duty.
Article 16 of the Labour Law obligates employees to maintain the confidentiality of the information and data to which they have access by virtue of their work, not to disclose work secrets, and to return all confidential documents or data upon the end of their service.
Protecting Confidential Information Contractually: While UAE law imposes a duty, businesses should also secure confidentiality through well-crafted NDAs or contract clauses. These agreements clearly define what is confidential, how it can be used, and the penalties for breaches. Having employees sign NDAs helps deter leaks and strengthens your legal position, making NDAs a first line of defense.
Our Understanding what constitutes as confidential information under UAE Law: From our experience in handling cases for companies where alleged disclosure of confidential secrets takes place, we understand that confidential information in the UAE can be any business information meant to be kept secret – and that there is no exhaustive list, so it ranges from technical trade secrets to client data, financial records, pricing, branding strategies, etc. UAE law (through the UAE Civil Code and UAE Labour Law) requires employees to honor confidentiality and not breach the trust of their employers. However, prudent companies reinforce this via NDAs and confidentiality clauses. Next, we explore what you as an employer can legally do if that trust is broken – the civil and criminal remedies at your disposal.
Civil Remedies for Breach of Confidentiality
In the UAE, if an employee discloses confidential information without authorization, employers have a range of civil remedies to stop further damage, hold the individual accountable, and seek compensation.
Immediate Termination of Employment: Employers can terminate employees for cause without notice if they breach confidentiality. Under Article 44(5) of the UAE Labour Law , revealing company secrets that cause financial losses or benefit the employee is classified as gross misconduct. After conducting a proper written investigation and issuing a dismissal letter, the employer can immediately end the employment and cut off the employee’s access to sensitive internal systems.
Our Perspective– We advise our Clients (who are employers) to always conduct a through internal investigation upon discovering that such confidential information is leaked before terminating the employees and once they decide to terminate, a detailed termination notice is issued to violating employees. This would ensure that if the employees later claim for wrongful termination before the labour courts, the employers’ rights are protected by law.
Injunctions and Preventive Orders: In urgent situations, UAE courts can provide immediate relief to prevent further dissemination of confidential information. Employers may request court orders to seize data or documents, prohibit further disclosure, or prevent an employee from working for a competitor if a valid non-compete agreement is in place. Quick action is often possible if evidence, such as emails to competitors clearly demonstrates the breach.
Our Perspective- Although this is a remedy available, we insist that this is done only once an internal investigation is completed and there is adequate proof available with the employer that the employee has been disclosing and disseminating the information.
Breach of Contract Claims: Employers can sue employees who violate confidentiality clauses or NDAs. UAE law allows employers to claim damages for financial losses, reputational harm, or lost business opportunities. Courts may also enforce liquidated damages clauses if they are reasonable and not punitive. Unlike typical employment disputes, there’s no time limit on claims related to trade secret disclosure, allowing employers to act years after a breach is discovered.
Our Perspective- This has proven to be an effect course of action where employers initiate a civil case against the employee. However, the courts would be inclined to appoint an expert, it is important that all the evidence that the employer has against the employee is made available to the expert and clearly explained to the expert. A favourable expert report would also mean that the Court would be inclined to give compensation to the employer, if claimed when initiating the suit.
Unfair Competition Claims: If a competitor induces an employee to leak confidential information, the competitor may also face civil liability. UAE law prohibits unfair competition, and companies that misuse business information can be pursued for damages or regulatory penalties. This provides an added layer of protection for employers against external parties that benefit from disclosed trade secrets.
Criminal Remedies for Confidentiality Breaches
The UAE treats breaches of confidentiality as serious criminal offenses, reflecting the importance of protecting business secrets. Two primary frameworks address these breaches: the UAE Penal Code and the Cybercrime Law.
Criminal Breach of Trust: Under Article 432 of Federal Decree-Law No. 31/2021 (UAE Penal Code) the Penal Code, employees entrusted with confidential information who disclose it without legal justification face criminal prosecution. Penalties include a minimum of one year in prison and fines starting at AED 20,000. In cases involving severe harm or aggravating circumstances, such as public officials disclosing employer secrets, the penalties can be significantly harsher. The mere act of unauthorized disclosure is enough to trigger liability, without needing to prove financial loss.
Our Perspective: From our experience, it is important that employers note that although there may be a criminal investigation that proves that the crime by the employee, we have come across various cases where the criminal courts have taken a different view since the crime has not been established “beyond reasonable doubt”. Therefore, employers filing criminal suits should keep in mind that they are to provide to the public prosecution the evidence that would prove “beyond reasonable doubt” the crime committed by the employee as criminal convictions cannot be based on assumptions with an air of doubt.
Cybercrime Offenses: The Federal Decree-Law No. 34/2021 (UAE’s Cybercrime Law) imposes severe penalties for using electronic means to share confidential information. Disclosing company data through electronic networks can result in a minimum of five years in prison and fines ranging from AED 500,000 to AED 3,000,000. Attempting to obtain confidential business data through unauthorized access is also heavily penalized, demonstrating the UAE’s firm stance on digital breaches.
Data Protection Regulations: If confidential information includes personal data, the UAE’s Personal Data Protection Law (PDPL) may apply. This law requires companies to take security measures to protect personal data and report breaches. Non-compliance can lead to administrative fines of up to AED 5 million. While fines under the PDPL are typically levied on the company, the law highlights the need for robust data protection practices and holds employees accountable for their roles in breaching confidentiality.
Our Perspective: Employers and employees must both be aware of the particular legal requirements, conditions, and penalties associated with this offence to prevent inadvertent infractions. Protecting private data is more important than ever in the connected world of today. People and organisations can safeguard themselves from legal consequences while preserving the integrity of sensitive data by abiding by professional regulations and exercising caution.
Proactive Measures Employers Can Consider to Prevent Breaches
Prevention is always better than cure. While legal remedies are important, employers should take proactive steps to minimize the risk of breaches especially because the Labour Law is an employee beneficial law, the Labour Courts in the country tend to prioritize the claims from employees rather than that of the employers.
Some of our suggested proactive steps are:
Draft Strong Contracts and NDAs: Clearly define what constitutes confidential information, set limitations on its use, and outline consequences for breaches. Non-compete clauses can further protect against competitors poaching key employees.
Employee Training: Regularly educate staff about confidentiality obligations, provide clear examples of what not to disclose, and emphasize the legal consequences of breaches.
Internal Policies and Controls: Implement need-to-know access levels and robust IT security measures. Establish policies for proper data handling, reporting suspected leaks, and securely returning company devices and information after employment ends.
Technology Solutions: Use tools that track data access and prevent unauthorized transfers. Regularly update security protocols, encrypt sensitive files, and maintain secure backups to quickly assess any breach.
Audits and Reviews: Periodically review confidentiality measures to adapt to changing business conditions and threats. Conduct audits to identify weaknesses and improve safeguards over time.
Why Swift Action and Legal Support Matter
When a confidentiality breach occurs, quick and decisive action is crucial in order to ensure that further breach and does not aggravate the losses. Investigating promptly, taking appropriate legal advice , involving law enforcement if necessary, and pursuing civil and/or criminal remedies sends a strong message: breaches will not be tolerated. Taking strict action would also ensure that other employees do not consider disseminating confidential information for any personal gain.
Filing a criminal complaint can lead to immediate consequences for the offending employee, such as arrest, electronic device confiscation, and travel restrictions. Meanwhile, civil actions like injunctions and damages claims help prevent further harm and shift the financial burden onto the wrongdoer. A combined approach—using both criminal and civil remedies—ensures maximum protection and accountability.
By taking swift legal steps and partnering with capable legal counsels and consultants, you protect your company’s sensitive information, reinforce trust within your workforce, and deter future breaches. As a UAE-based legal consultancy, we are here to guide you through both preventive measures and legal responses, safeguarding your business every step of the way.
