Confidentiality Disclosure Exception Issue

So I’m talking with a potential vendor who has asked for the ability to disclose confidential information for a reason I’ve never heard of before (at least not quite in this manner): they want either party to have the ability to disclose the other party’s confidential information if such party reasonably believe that the other has violated any criminal law.

Well, at least it was mutual.

But it’s a request I simply can’t agree to because it’s an exception that I think you can drive a truck through. More specifically, there are two key phrases in this exception: “reasonably believe” and “violated any criminal law.”

Reasonable belief
My first question is one of practicality. Who is the person who gets to “reasonably believe” that the behavior of the other is violating any laws? Bill down in sales? Carol in legal? And upon what grounds does this belief have to be based? Reasonableness is a test that judges and legislators like to use – but I’m simply not convinced that a reasonableness standard is appropriate here.

Violated any criminal law
This question is bigger for me and, for whatever reason, I have a more visceral reaction to this. I guess I just have some level of faith in our criminal justice system and in criminal procedure laws. It offends me that these laws would somehow not apply to this type of situation – that the other party simply wants to be able to hand over our confidential information without limitation and without the protections afforded under our criminal procedure processes.

Related to this is the fact that I already give a standard exception for “disclosure pursuant to legal process” which allows for disclosures (with notice and with help in the obtaining of a protective order) if so required by a court of competent jurisdiction (ie: through a subpoena appropriately requested by a prosecutor and authorized by a judge). Apparently, however, this isn’t good enough and the vendor states that there are laws (which they haven’t provided citations for) that would require them to disclose confidential information immediately and without limitation. Heck, even the Patriot Act is bound by some modicum of criminal procedure.

But I’m willing to be wrong. So, thoughts from the rest of the world on this? Would you allow your opponents to have this exception? How would you modify it?


One thought on “Confidentiality Disclosure Exception Issue

  1. chrislemens


    Their request seems overbroad.

    I think you could loosen the obligations to notify and assist sufficiently to cover their concern. For example, you could require the recipient to notify the discloser unless that notice is prohibited by law, to seek a protective order until delivering that notice, and to cooperate with discloser’s efforts to obtain a protective order after delivering that notice.

    I could see an exception that nothing in the agreement requires the recipient to take any action (or refuse to take any action) that would subject the recipient to criminal liability. But that is very different from what they are suggesting.



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