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Employees must know company disclosure limits

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in Employment Law,Human Resources

Q. During a recent Internet chat room exchange, an individual self-identified as an employee came to our company's defense over a recent drop in stock price. The employee came dangerously close to disclosing information about earnings that were not yet public. What should we do? —C.F., New Jersey

A. The disclosure of nonpublic or insider information can violate federal and state securities laws. Remind employees that the company's confidential information should not be shared with anyone, even for the purpose of defending the company. Sharing information on the Internet is publicly disseminating the information and, in addition to potentially violating the law, could harm the company and its investors.

Advise employees that, to avoid the risk of confidential information slipping into the public domain, they should refrain from discussing company business or issues on the Internet. To help them, include in your employee handbook a confidentiality provision that guides them on the types of information that the company considers confidential. Also, ask your employees to sign a confidentiality agreement.

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