Confidentiality law in the UK has four elements in identifying confidential information in a trade or industrial setting:

The information must be information the release of which the owner believes would be injurious to him or of advantage to his rivals or others.
The owner must believe the information is confidential or secret, i.e., not already in the public domain.
the owner's beliefs under the previous two heads must be reasonable.
The information must be judged in the light of the usage and practices of the particular industry concerned

Imposing Confidentiality

The way in which someone can become subject to an obligation of confidentiality are:
expressly by a contractual obligation
implied by a contractual obligation
from the nature of the relationship between the discloser and recipient

Generally an obligation of confidence will be imposed whenever confidential information is disclosed for a limited purpose. The recipient of the information will then be under a duty to use the information for the limited purpose only, and if he discloses or uses the information for any other purpose he will be in breach of his obligation and is liable to be restrained by injunction or subject to other appropriate remedies

Employees

Staff learn much about the organisation and management of a business. They need information about the business in order to do their job, and they generate confidential information in the course of their employment. An employer may want to be able to exercise some sort of control over this sort of information after an employee has left. The general principle is that the employee holds the confidential information for the benefit of the employer.

Employee Contracts

The use of contractual barriers can impose on people an obligation of confidentiality. This may be due to an express or implied term within the contract.
A contract may be entirely oral, entirely written or only part written, but will be binding where one party agrees to disclose information and the other agrees to treat it as confidential. If the contract is wholly in writing, it is easier to prove what has been agreed, and if well written, may reduce to risk of misunderstandings.

An implied contract term will only be enforced by law if the court finds that the parties intended for the term to be included in the contract at the time of creating the agreement. It is clearly better to expressly deal with confidentiality issues, especially when partaking in sensitive or potentially sensitive negotiations. Such negotiations may involve revealing technical information or prototypes to customers or manufacturers for purposes such as evaluation.

Employment contracts do, however, cause problems, as the contractual obligation of confidence is subject to the fact that an employee is, after the termination of his contract of employment, free to use his general knowledge and skill either for his own benefit or for the benefit of others. However, the employer will want to stop any information being given to the competitor which may increase competition or damage business.
An employees obligation of confidence may be found in the express or in the implied terms of his contract of employment.
In employment cases the implied obligation of confidence is to act in good faith and fidelity, which every employee owes to his employer. This obligation exists during the term of the contract, but, also continues once the employee terminates employment and as long as the information remains confidential.

The obligation of fidelity owed by an employee to his employer, whilst employed, can be expressed as follows:
An employee is bound not to disclose or use confidential information which he receives in the course of his employment for purposes which are against the interests of his employer.
An employee must not use information for personal benefit or work for any of his competitors.
The employee is bound to disclose to his employer any valuable information which he receives in his capacity as an employee and which is unknown to his employer, and this will include any confidential information which would further his employer's trade.
After employment has terminated the employee's implied duty of good faith continues and he will still be required to keep confidential those secrets which he learnt during his former employment

In order to determine whether information could be classified as so confidential that an employee should not be allowed to use or disclose it for the benefit of a subsequent employer it is necessary to consider all the circumstances of the particular case.

The following are among those to which attention must be paid:
the nature of employment: if the employee regularly handled confidential information then he or she can be expected to recognise confidential information more readily than other employees.
The nature of the information: in order to be protected the information must be of a highly confidential nature.
Whether the employer pointed out to the employee the confidentiality of the information.
Whether the relevant information can be easily distinguished from other information which the employee uses

The result of this is that if information is not categorised as confidential under those criteria then it forms part of the employee's general knowledge and skill. The common law limits protection to trade secrets and therefore makes it more difficult for a business to protect its confidential information when an employee leaves, unless it protects itself via contract clauses for specific aspects of its information assets.