What is the confidentiality clause?
Nowadays, confidentiality or non-disclosure clauses are included in many contracts or agreements in order to impede involved parties to disclose or grant access to confidential information. It is also common practice to draft non-disclosure agreements in which every confidentiality clause is treated separately. The confidentiality clause whether used in an international or national context will usually convey the obligations of the person that receives confidential data. The confidentiality clause may also contain specifications regarding the consequences of breaching the clause.
Non-disclosure in employment contract in Hungary
According to the Hungarian legislation on employment, Articles 3 to 5, persons engaged in employment contracts with companies have the obligation not to disclose any confidential information that could harm the economic or moral rights of the company. Hungarian companies also have the obligation not to disclose any information that could violate an employee’s right to privacy. Also, subject to a written agreement, an employee may have a non-competition clause after terminating his or her contractual relations with an employer. The agreement cannot exceed a period of three years during which the former employee will receive appropriate remuneration, according to the Hungarian Civil Code. Such agreements are usually signed in order to protect companies’ trade secrets.
The Privacy Act in Hungary
The Parliament adopted in July 2011 the CXII Act on Informational Self-Determination and Freedom of Information, also known as the Privacy Act. The new Hungarian Privacy Act comes as a replacement of the Protection of Personal Data and Disclosure of Information of Public Interest Act of 1992. Data processors are now compelled to request a person’s consent when disclosing confidential information, unless the data is used for legal purposes or legitimate interests. All confidential information will be kept in a data transfer registry that must hold the following:
- – the date,
- – the legal base and information about who the data is transferred to,
- – the purpose of data transfer.
Confidential information can be now blocked instead of being deleted and the data processing can continue without the person’s consent if required by the law or for legitimate interests.
The Data Protection Supervisory Authority in Hungary
The new authority for data protection in Hungary is an administrative agency that has an enhanced role in protecting confidential information and can also impose fines on those not complying. The Data Protection Authority’s officers will also gather for annual meetings. When registering confidential information with the authority a fee will be charged. Financial institutions, public utility administrations and telecommunication service providers must notify the Data Protection Supervisory Authority in Hungary before submitting any confidential data on their clients.
Our law firm in Hungary can provide detailed information about confidentiality agreements. You can also contact us for information about provisions of the Commercial Code in Hungary.