Can an employer disclose a departing employee’s restrictive covenants to their new employer?
It is standard course for an employer to notify a departing employee’s new employer of any post-termination restrictions in place. Often this will simply be by cutting and pasting across the relevant sections from the employee’s contract of employment.
An employee’s contract of employment will contain “personal data” as defined under Article 4(1) of the GDPR and disclosure of such information to a new employer would amount to “processing”. In order to lawfully process personal data, an employer must have a lawful basis to do so in accordance with Article 6(1) of the GDPR.
The most applicable grounds that the former employer will be able to rely on are that:
Processing is necessary for the performance of a contract to which the data subject (employee) is a party to (i.e. ensuring the post-termination restrictions are complied with); or
Processing is necessary for the legitimate interests pursued by the data controller (former employer) i.e. to protect its business and proprietary interests.
It is arguable that it would have been within the reasonable expectations of the employee that processing of this kind would take place in order to ensure that a breach of post-termination restrictions does not take place.
In short, an employer should not be in breach of the GDPR provided that:
It is certain that the employee has commenced employment/accepted an offer of employment with the new employer; and
Only the relevant provisions of the employee’s contract are sent to the new employer (e.g. confidentiality and post-termination restrictions). The former employer should not send the employee’s contract in its entirety.
If you are concerned about disclosing personal data, we recommend that you obtain specific guidance from the ICO.
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