Employees are the key asset of every company; however they have access to trade secrets and confidential information. Apart from this they even have enough influence on other employees that they can cause them to leave the company and work for a competitor. Thus every company should ensure that they are safe guarded against issues. Karen’s release is legal under the doctrine of employment at-will, providing she was an employee. Thus Catastrophe Concepts can issue a termination letter to Karen as she has an Employment-at-will status. Thus only receiving an appointment letter and a contract does not provide employees with job security, and an employee can be terminated within a minute without even having any reason at all (Van Buren & Greenwood 2008).
On the other hand, if Karen was a contractor, then Catastrophe Concepts would have broken the employment contract which would be illegal. Catastrophe Concepts can not prohibit Karen from passing their trade secret or misusing confidential information to someone else as a result of her employment. Also, they cannot prohibit her to continue even after the employment has come to an end and if the employee had breached this duty by disclosing employer trade secrets, the employer has several remedies.
Catastrophe Concepts should have mentioned in Karen’s contract at the time of employment that all information was confidential and should not be used else where. They should made her sign another contract stating the following. I acknowledge that all Confidential Information, whether or not in writing and whether or not labelled or identified as confidential or proprietary, is and will remain the exclusive property of the Company or the third party providing such information to me or the Company. Nevertheless, there is no implied term which forces the duty on Karen not to disclose any information after the termination of the employment is very restricted.
So, it is not possible to restrain Karen from disclosing to a future employer a special method of organization, as opposed to a secret process, for the employee and employer both have to know the difference between objective knowledge, such as trade secrets and lists of customers, which are part of the property of the employer, as well as subjective knowledge which the employee has gained through his own experience, like his knowledge regarding the market or industry (Callahan 1990). Accordingly, the rationale of these previous decisions was not to support either one, for example, the employer or the employee, but was focused on protecting research and development and to eliminate industrial espionage (Cross 1991).
Therefore if a trade secret, or a secret course of action, is present in the organization, the employer is at liberty to have his employees sign a contract not to give that information to a future employer however in this case the employer did not do this. However, it should also be kept in mind that if Karen discloses confidential information in good faith then there are a number of rules which may protect Karen as she will be disclosing the information in good faith the new employer.
Section 43 G ERA 1996 is one such Act which may free Karen of any restrictions on her regarding protected disclosure as is it based on limited circumstances. However, the Act will only be effective if Karen acts in good faith, acts reasonably, and does not disclose information for personal reasons, reasonably consider the information or any claim regarding it to be valid (Lewis 2001).
In another words, the employee can make use of his experience and his individual skills or "know-how" which was gained during her stay at Catastrophe Concepts.