Unauthorized disclosure: Overview, definition, and example
What is unauthorized disclosure?
Unauthorized disclosure refers to the act of revealing or sharing confidential, proprietary, or sensitive information without proper authorization. This can occur when a person or organization discloses information to parties who are not entitled to receive it, or when the disclosure occurs in violation of laws, regulations, or agreements. Unauthorized disclosure can happen intentionally or accidentally, but in either case, it can lead to legal consequences, reputational damage, and financial penalties.
For example, an employee might unintentionally disclose trade secrets to a competitor by sending an email containing confidential company information without realizing they should not share it.
Why is unauthorized disclosure important?
Unauthorized disclosure is important because it can compromise the confidentiality and security of sensitive information, which could be critical to an individual’s privacy, a company’s competitive edge, or a nation’s security. For businesses, unauthorized disclosure of confidential information such as client data, financial reports, or trade secrets can damage relationships, lead to regulatory violations, or result in significant legal penalties.
Protecting against unauthorized disclosure is a key part of maintaining trust, ensuring compliance with privacy laws, and safeguarding intellectual property or personal data. It helps organizations avoid legal risks and protects the integrity of their operations.
Understanding unauthorized disclosure through an example
Imagine a law firm that handles confidential legal documents for its clients. One of the employees mistakenly sends an email with sensitive client information to the wrong recipient, violating confidentiality agreements. This unauthorized disclosure could result in a breach of client trust and legal repercussions for the firm.
In another example, a healthcare provider may have access to patient medical records. If a staff member discloses a patient's private health information to an unauthorized person, such as sharing medical details with a family member without consent, this is considered unauthorized disclosure and can lead to violations of privacy laws such as the Health Insurance Portability and Accountability Act (HIPAA).
An example of an unauthorized disclosure clause
Here’s how an unauthorized disclosure clause might appear in a contract:
“The Recipient agrees not to disclose any confidential information received from the Discloser to any third party without the prior written consent of the Discloser, except as required by law or as necessary to perform obligations under this Agreement.”
Conclusion
Unauthorized disclosure refers to the improper sharing of confidential or sensitive information without proper authorization. It is critical for businesses and individuals to understand the risks and consequences of such disclosures, ensuring they take the necessary precautions to protect sensitive data. By including clear clauses on unauthorized disclosure in contracts, businesses can safeguard their intellectual property, customer data, and sensitive information, avoiding legal issues and maintaining trust.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.