1. Meaning of an Onboarding Confidentiality Undertaking

An onboarding confidentiality undertaking is a written commitment obtained from an employee at the time of joining employment under which the employee agrees to protect the employer's confidential information and not misuse or disclose it without authorization.

It is commonly included in:

• appointment letters;
• employment agreements;
• Non-Disclosure Agreements (NDAs);
• employee handbooks;
• information-security policies;
• intellectual-property agreements; and
• separate confidentiality undertakings signed during onboarding.

The purpose is to establish a clear contractual duty that information received by the employee because of employment must be protected.

Typical protected information may include:

• trade secrets;
• source code and software;
• technical specifications;
• manufacturing processes;
• business strategies;
• pricing information;
• customer and supplier information;
• unpublished financial information;
• product development plans;
• marketing strategies;
• internal reports;
• passwords and security credentials;
• proprietary databases;
• research and development information; and
• confidential personal or employee information.

However, an employer cannot simply label every piece of workplace information "confidential" and expect the restriction to be enforceable. Courts distinguish genuine confidential information from ordinary knowledge, experience and information already available in the public domain.

2. Why Confidentiality Undertakings Are Used During Onboarding

The onboarding stage is particularly important because an employee may immediately receive access to sensitive information.

For example, a newly appointed software employee might receive:

• Git repositories;
• source code;
• API credentials;
• database access;
• customer information;
• product roadmaps; and
• internal technical documentation.

A confidentiality undertaking establishes that the employee understands that this information belongs to the employer and must not be disclosed or misused.

It also helps the employer establish evidence that:

1. the employee knew the information was confidential;
2. the employee accepted an obligation of secrecy;
3. the information was provided for employment purposes;
4. unauthorized disclosure was prohibited; and
5. the employer took reasonable steps to protect the information.

3. Legal Foundation in India

India does not have one comprehensive statute exclusively governing employee trade secrets and confidential information.

Protection generally arises through a combination of:

• Indian Contract Act, 1872;
• principles of equity and breach of confidence;
• intellectual-property principles;
• copyright law where applicable;
• employment contracts;
• company policies;
• information-technology laws where electronic information is involved; and
• judicial decisions.

The contractual undertaking is therefore particularly important.

At the same time, the undertaking cannot be drafted so broadly that it effectively prevents an employee from pursuing a lawful occupation after leaving employment.

This distinction is crucial because confidentiality protection and post-employment non-compete are legally different concepts.

4. Confidentiality vs Non-Compete

These provisions should never be treated as identical.

Confidentiality clause

The employee promises:

"I will not disclose or misuse the employer's confidential information."

Non-compete clause

The employee promises:

"I will not work for a competitor or conduct a competing business."

The first is generally directed toward protecting confidential information.

The second restricts the employee's future economic activity.

Section 27 of the Indian Contract Act, 1872 is particularly relevant to agreements restraining a person from carrying on a lawful profession, trade or business.

Indian courts have generally been much more willing to protect genuine trade secrets than to enforce broad post-employment restraints on employment. This distinction is strongly reflected in Niranjan Shankar Golikari v. Century Spinning & Manufacturing Co. and Krishan Murgai v. Superintendence Co. of India.

5. What Should an Onboarding Confidentiality Undertaking Contain?

A properly drafted undertaking should identify the principal elements clearly.

A. Definition of Confidential Information

The agreement should explain what constitutes confidential information.

For example:

Confidential Information means all non-public technical, commercial, financial, operational, customer, supplier, business and strategic information disclosed to or accessed by the employee in connection with employment.

The definition may specifically include:

• documents;
• electronic files;
• databases;
• source code;
• designs;
• algorithms;
• customer lists;
• pricing;
• business plans;
• financial information;
• internal communications;
• research;
• product information; and
• trade secrets.

6. Public-Domain Exception

A good confidentiality undertaking should exclude information that:

• is already publicly available;
• becomes publicly available without breach by the employee;
• was lawfully known by the employee before disclosure;
• is independently developed without use of confidential information; or
• must be disclosed by law or court order.

This is important because information that is already publicly available normally cannot be converted into a private trade secret simply by inserting the word "confidential" into an employment agreement.

The Delhi High Court emphasized this principle in Ambiance India Pvt. Ltd. v. Naveen Jain, holding that ordinary business knowledge and matters commonly known to others cannot automatically be treated as trade secrets.

7. Employee's Core Obligation

The employee should undertake:

During employment

• not to disclose confidential information;
• not to copy information unnecessarily;
• not to use information for personal purposes;
• not to transfer information to unauthorized persons;
• not to upload confidential material to personal cloud storage;
• not to send company information to personal email;
• not to disclose information to competitors; and
• to follow the company's security procedures.

After employment

The employee should continue to protect information that genuinely remains confidential or constitutes a trade secret.

The duration can therefore differ depending on the nature of information.

For example:

Ordinary confidential information:
The obligation may apply while the information remains confidential.

Trade secret:
The obligation may continue as long as the information retains its status as a trade secret.

8. Ownership of Confidential Information

An onboarding undertaking should clearly state that confidential business materials remain the property of the employer.

For example:

All documents, records, databases, designs, software, reports and other materials containing Confidential Information shall remain the property of the Company.

This is particularly important when employees are given:

• laptops;
• documents;
• technical manuals;
• databases;
• client records;
• research materials;
• prototypes; or
• source code.

9. Return and Deletion Obligations

A strong undertaking should contain a return-of-property clause.

Upon resignation or termination, the employee may be required to:

• return company devices;
• return physical documents;
• return access cards;
• return storage media;
• delete company information from personal devices where lawfully required;
• delete unauthorized copies;
• surrender passwords or company credentials where applicable; and
• certify compliance if the employer's policy requires it.

This is particularly important because confidentiality can be defeated if the employee retains copies after leaving.

10. Electronic Confidentiality

Modern onboarding undertakings should expressly address electronic information.

Examples include prohibiting unauthorized:

• screenshots;
• downloads;
• forwarding;
• cloud uploads;
• USB transfers;
• personal-email transfers;
• messaging-app transfers;
• database exports;
• copying of source code; and
• access to information outside the employee's authorization.

A confidentiality undertaking should therefore operate alongside the employer's cybersecurity and access-control policies.

11. Confidentiality Does Not Mean Suppressing Employee Skill

One of the most important legal limitations is that an employer cannot ordinarily claim ownership over an employee's general skill, knowledge and experience merely because the employee acquired or improved those skills during employment.

In Krishan Murgai v. Superintendence Co. of India, the Delhi High Court emphasized that an employee's general skill and knowledge acquired through employment are not automatically trade secrets. The employer must identify a genuine protectable interest such as confidential technical information, secret processes or proprietary know-how.

This principle is particularly important for onboarding agreements.

An employee should not be contractually transformed into someone who cannot use their professional expertise after leaving.

12. Major Case Laws

1. Niranjan Shankar Golikari v. Century Spinning & Manufacturing Co. Ltd.

Supreme Court of India

This is one of the leading Supreme Court decisions concerning employment restrictions and confidential information.

The employee had received specialized training and had access to technical know-how and confidential manufacturing information. The employment agreement contained restrictive obligations concerning employment and disclosure.

The Supreme Court distinguished between:

• restrictions operating during employment, and
• restrictions operating after employment.

A negative covenant requiring an employee to serve the employer exclusively during the contractual employment period was treated differently from an excessive restraint on future employment.

Principle

An employer can protect legitimate confidential information and enforce reasonable negative obligations operating during employment.

The case demonstrates why onboarding confidentiality undertakings are particularly important where employees receive specialized technical training and proprietary know-how.

2. Krishan Murgai v. Superintendence Co. of India (P) Ltd.

Delhi High Court

This is a leading authority concerning employee confidentiality and restraint of trade.

The Court emphasized that an employee's general skill and experience cannot simply be classified as the employer's trade secret.

For protection of trade secrets, the employer should identify information such as:

• secret formulas;
• secret processes;
• proprietary information;
• specialized know-how; or
• information possessing a genuine proprietary character.

Principle

Confidential information must actually be confidential.

An employer cannot use a confidentiality clause as a disguised mechanism for preventing an employee from earning a livelihood after employment ends.

3. Ambiance India Pvt. Ltd. v. Naveen Jain

Delhi High Court, 2005

This case is extremely useful for understanding the limits of confidentiality undertakings.

The employer sought protection concerning alleged trade secrets and attempted to restrict the employee from working with customers and competitors.

The Court observed that ordinary business knowledge, general customer familiarity and routine information cannot automatically qualify as trade secrets.

The Court explained that a genuine trade secret may include:

• technical know-how;
• formulas;
• processes;
• special methods of business; or
• confidential information unknown to others.

Principle

A confidentiality undertaking must protect identifiable confidential information, not ordinary professional knowledge.

The Court also distinguished confidentiality protection from an impermissible post-employment restraint.

4. Bombay Dyeing & Manufacturing Co. Ltd. v. Mehar Karan Singh

Bombay High Court, 2010

This is a particularly important confidentiality case.

The employee had contractual obligations not to disclose confidential information concerning the company's:

• business affairs;
• know-how;
• technology;
• methods;
• manufacturing information;
• customer and supplier information; and
• other proprietary material.

The Court found a breach of confidentiality and granted protection against disclosure and use of identified confidential material.

Principle

Where an employer can demonstrate specific confidential information and a real risk of misuse, courts may grant injunctive relief.

The case demonstrates the practical importance of a properly drafted confidentiality clause during onboarding.

5. Hi-Tech Systems & Services Ltd. v. Suprabhat Ray

Calcutta High Court, 2015

The case concerned former employees and alleged use of trade secrets and confidential information.

The Court discussed the difference between:

• an employee's general skill and knowledge; and
• proprietary trade secrets belonging to the employer.

It recognized that a legitimate interest in protecting trade secrets can justify appropriate protective measures.

At the same time, a restriction that effectively prevents a former employee from pursuing employment or business after termination may be vulnerable under Section 27 of the Contract Act.

Principle

Protect the information, rather than attempting to prohibit the person's entire future career.

6. I Broad 7 Communication Pvt. Ltd. v. Gaurav Kumar Patel

Delhi High Court, 2023

The dispute involved an employee NDA containing obligations concerning confidential information and trade secrets.

The case illustrates the importance of proving:

1. the existence of the confidentiality obligation;
2. the confidential nature of the information;
3. the employee's access to the information; and
4. the alleged misuse or disclosure.

The Court considered an NDA provision requiring the employee to maintain strict confidentiality and prohibiting use of confidential information for personal purposes or for the benefit of others.

Principle

A written NDA creates an important contractual framework, but the employer still needs to establish the actual confidential character of the information and the alleged breach.

7. American Express Bank Ltd. v. Priya Puri

Delhi High Court

This case is important in the context of customer information and confidential business information.

The Court considered whether customer-related information could be protected as confidential information and examined the distinction between legitimate confidential information and information that an employee could legitimately use as part of general professional experience.

Principle

Customer information can receive protection where it possesses a genuine confidential character, but an employer cannot automatically treat every customer-related fact as a proprietary trade secret.

8. Zee Telefilms Ltd. v. Sundial Communications Pvt. Ltd.

Bombay High Court

This case is frequently discussed in the context of confidential information and commercial ideas.

The Court considered whether information disclosed in circumstances giving rise to an obligation of confidence could receive protection.

Principle

Confidentiality can arise not merely from a written contract but also from the circumstances in which information is communicated and the nature of the relationship between the parties.

This supports the importance of documenting confidentiality obligations clearly at onboarding.

13. What Courts Generally Look For

When an employer seeks an injunction for breach of an onboarding confidentiality undertaking, courts are likely to examine questions such as:

1. Was the information actually confidential?

Merely writing "confidential" on a document may not be sufficient.

2. Was the information accessible to the employee?

The employer should demonstrate that the employee actually received or accessed it.

3. Was the information proprietary?

Information that is publicly available is much less likely to receive protection.

4. Did the employer take steps to preserve secrecy?

For example:

• passwords;
• restricted access;
• confidentiality agreements;
• access logs;
• encryption;
• internal classification;
• need-to-know systems.

5. Did the employee misuse or disclose it?

There must generally be some factual basis for the alleged breach.

6. Is the employer trying to protect information or restrain competition?

This is a critical distinction.

14. Confidentiality Undertaking and Section 27

Section 27 of the Indian Contract Act is particularly important.

A confidentiality undertaking should ideally be drafted to prevent:

misuse or disclosure of confidential information

rather than:

employment with competitors in every circumstance.

For example:

More defensible

"The Employee shall not disclose or use the Company's confidential source code, proprietary algorithms or customer database."

Legally problematic

"For three years after leaving the Company, the Employee shall not work for any company engaged in the same industry."

The second provision looks like a post-employment restraint of trade, rather than a narrowly tailored confidentiality obligation.

Indian courts have repeatedly distinguished legitimate protection of trade secrets from broad post-employment restraints.

15. Duration of Confidentiality

A common drafting question is:

"How long should the confidentiality obligation continue?"

There is no universal period suitable for every type of information.

Option 1 – During employment only

Appropriate for information that loses relevance when employment ends.

Option 2 – Fixed post-employment period

For example:

"The obligation shall continue for three years after cessation of employment."

Option 3 – For as long as information remains confidential

This can be particularly appropriate for genuine trade secrets.

A good agreement should distinguish between ordinary confidential information and information that qualifies as a continuing trade secret.

16. Exceptions to Confidentiality

A comprehensive undertaking should normally contain exceptions for information:

1. already in the public domain;
2. independently developed;
3. lawfully obtained from a third party;
4. already lawfully known to the employee;
5. required to be disclosed under law; or
6. required to be disclosed pursuant to a court/regulatory order.

However, an employee should ordinarily notify the employer where legally permissible before making a compelled disclosure.

17. Whistleblowing and Legal Compliance

A confidentiality undertaking should not be drafted to suggest that an employee must conceal:

• unlawful conduct;
• fraud;
• regulatory violations;
• criminal conduct; or
• information that the employee is legally required to disclose.

An overly broad clause saying "employee shall never disclose any company information under any circumstances" is therefore poor drafting.

The undertaking should be subject to applicable law.

18. Confidentiality and Personal Data

Onboarding itself involves collection of employee information such as:

• identity documents;
• bank details;
• contact information;
• salary information;
• emergency contacts;
• educational records;
• employment history.

The employer's confidentiality obligations therefore operate in both directions.

An employee may owe confidentiality to the employer, while the employer may have legal obligations concerning the employee's personal information.

The Supreme Court has recognized that employment relationships can involve fiduciary/confidentiality elements, including circumstances in which employees receive confidential business information.

19. Breach of Confidentiality

A breach can occur when an employee:

• emails confidential documents to a competitor;
• copies source code;
• downloads customer databases before resignation;
• photographs confidential documents;
• uploads company files to personal cloud storage;
• shares pricing information;
• discloses manufacturing processes;
• uses proprietary information to establish a competing business; or
• sends confidential information to a former colleague.

Possible legal remedies may include:

Injunction

A court may restrain further disclosure or misuse.

Damages

The employer may seek monetary compensation where loss is legally established.

Account of profits

In appropriate circumstances, the employer may seek relief concerning profits obtained through wrongful use.

Delivery-up/destruction

The court may order return or destruction of confidential materials where appropriate.

Contractual/disciplinary consequences

The employment agreement and applicable disciplinary rules may provide additional consequences.

20. Importance of Evidence

A confidentiality undertaking is only one part of the employer's protection.

The employer should maintain evidence such as:

• signed onboarding agreement;
• confidentiality policy acknowledgment;
• access-control records;
• document classification;
• email logs;
• download records;
• device logs;
• employee exit declaration;
• return-of-property records;
• IT access termination records; and
• evidence identifying the confidential information.

A court is much more likely to understand the claim when the employer can demonstrate exactly what information was confidential and how the employee accessed or used it.

21. Best-Practice Structure for an Onboarding Undertaking

A well-structured document can contain:

22. Common Drafting Mistakes

Mistake 1: Defining everything as confidential

A clause saying "all information relating to the company is confidential" may be unnecessarily broad.

Mistake 2: Confusing confidentiality with non-compete

The employer should not use a confidentiality clause merely to prevent the employee from joining competitors.

Mistake 3: Protecting general skill

An employee's professional knowledge and experience should not automatically be treated as trade secrets.

Mistake 4: No public-domain exception

This can make the undertaking unnecessarily broad.

Mistake 5: No return/deletion clause

The employer may struggle to demonstrate that the employee was required to return or delete materials.

Mistake 6: No identification of important categories

A vague clause is less useful than one identifying the categories of information requiring protection.

Mistake 7: No security obligations

Modern confidentiality protection should cover electronic data.

23. Example

Suppose a company hires a software developer.

At onboarding, the employee signs a confidentiality undertaking.

The employee receives access to:

• proprietary source code;
• unreleased product designs;
• customer database;
• internal pricing;
• security architecture.

Six months later, the employee resigns.

Before leaving, the employee downloads the source code and customer database and sends them to a personal email account.

The company can potentially argue:

1. the employee signed the confidentiality undertaking;
2. the information was expressly identified as confidential;
3. the employee was given access solely for employment purposes;
4. the information was not publicly available;
5. the employee copied it without authorization;
6. the copying violated the contractual obligation; and
7. continued use or disclosure would cause commercial harm.

This is a substantially stronger case than an employer simply alleging:

"The employee knows how our business works."

The latter may merely represent the employee's general knowledge and experience.

24. Key Takeaways from the Case Law

The cases collectively establish several important propositions:

Principle 1

Confidentiality obligations can be enforceable during and after employment.

Principle 2

The employer must have a legitimate protectable interest.

Principle 3

Trade secrets and genuine confidential information can receive judicial protection.

Principle 4

General skill, experience and knowledge acquired by an employee are not automatically trade secrets.

Principle 5

Publicly available information normally cannot be converted into a trade secret simply through contractual wording.

Principle 6

A confidentiality clause should not become a disguised post-employment non-compete.

Principle 7

The more specifically confidential information is identified, the stronger the contractual framework generally becomes.

Principle 8

Courts can grant injunctions where misuse of genuine confidential information is established and appropriate relief is justified.

25. Conclusion

An onboarding confidentiality undertaking is an important employment-law mechanism for protecting an employer's legitimate confidential interests from the moment an employee joins the organization.

Its strongest legal purpose is to protect specific, genuinely confidential information, such as trade secrets, proprietary technology, customer databases, business strategies and non-public commercial information.

The central legal distinction is:

An employer may protect its confidential information, but it cannot ordinarily convert a confidentiality undertaking into a blanket prohibition on an employee using their own skills, experience and lawful ability to work.

The leading authorities—including Niranjan Shankar Golikari, Krishan Murgai, Ambiance India v. Naveen Jain, Bombay Dyeing v. Mehar Karan Singh, Hi-Tech Systems v. Suprabhat Ray, I Broad 7 Communication v. Gaurav Kumar Patel, American Express Bank v. Priya Puri and Zee Telefilms v. Sundial Communications—illustrate the balance between protecting legitimate business secrecy and preserving an employee's freedom to pursue a livelihood.