Breach of Confidentiality in UAE Employment Contracts

Welcome back to Lawgical with Ludmila, where we untangle the legal knots so that you do not have to. I am Ludmila Yamalova, a US-qualified lawyer based in Dubai. In each episode, we break down complex laws and share practical insights that you can actually use.

In this episode, we will discuss confidentiality agreements in the UAE, particularly in the context of employment relationships.

As we all know, confidentiality provisions are standard in employment contracts. In most cases, they are drafted very broadly and written quite forcefully. When employment ends—especially if it ends badly—these clauses are often invoked aggressively. But here is the legal reality: alleging disclosure of confidential information is not enough.

In the UAE, claims of breach of confidentiality are treated as contractual liability, and contractual liability requires proof.

Why This Topic Matters

Today, I want to explore confidentiality in employment relationships through a specific case study. This case comes from the Dubai Court of Cassation, the highest court in Dubai, and was decided recently in 2025.

Discussing a real case helps contextualize these principles, which are often broadly cited by employers and other parties, sometimes as a blanket shield under the label of “confidentiality.” This is especially important in employment contexts, where there is often a power imbalance:

• The employer is the stronger party
• The employee is often in a more vulnerable position

As a result, employees may feel pressured to sign confidentiality agreements—either at the start or at the end of employment—without fully understanding their implications.

The Reality of Confidentiality Clauses

From both personal and professional experience, I have reviewed countless employment agreements with confidentiality clauses. What still surprises me is how many reputable global companies continue to include extremely broad and all-encompassing confidentiality provisions, many of which are, in reality, unenforceable.

I recall a case from early in my career, over 20 years ago, when I was working as in-house counsel in Silicon Valley for a fiber optics company. In that case, the court made an important point: just because something is labeled as confidential does not mean it is confidential.

For information to be protected:

1. It must actually be confidential in nature
2. It must be clearly identified as confidential

It is not enough to say that all communication between parties is confidential.

Modern Reality: Why Broad Clauses Fail

Fast forward to today: everything is digital. Emails, WhatsApp messages, documents—our entire communication ecosystem is digital.

It is simply unrealistic to claim that every exchange is confidential. If a case reaches court, it is not feasible to prove that all digital communication between parties qualifies as confidential information. There must be:

• Logic
• Reasonableness
• Specificity

Yet many companies continue to rely on outdated practices.

End-of-Employment Pressure

Another common issue arises at the end of employment. Employers often present employees with additional documents—new confidentiality obligations—during termination.

Important point: you should not be signing new obligations upon exiting employment unless there is additional compensation. If something is truly valuable to the company, they should:

• Identify it clearly
• Offer compensation for additional restrictions

Otherwise, they should have addressed it earlier.

The Case Study (Dubai Court of Cassation, 2025)

Let us now look at the case.

The Employer’s Claim

The employer filed a case against a former employee, alleging:

• Disclosure of trade secrets
• Diversion of clients
• Commercial loss

They sought nearly AED 2 million in damages.

Court Findings

At every level—

• Court of First Instance
• Court of Appeal
• Court of Cassation

—the courts rejected the claim.

Why? Because:

• The alleged losses were not proven
• The damages were not quantified

Key Legal Principle

The Court of Cassation clarified that to establish liability for breach of confidentiality, three elements must exist:

1. Fault
2. Actual damage
3. Causal link between fault and damage

If even one element is missing → the claim fails.

Critical Takeaways from the Case

• A confidentiality agreement alone is not enough
• Even a breach is not enough
• There must be real, proven damage
• The damage must be directly linked to the breach

In this case:

• The employer could not prove actual damage
• The losses were speculative

Result: the entire claim failed.

What the Employer Actually Won

The employer only succeeded in minor claims:

• Housing allowance adjustment (~AED 10,000)
• Partial notice compensation
• 5% interest

Everything else was rejected.

Core Legal Principles (Simplified)

To successfully claim breach of confidentiality in the UAE:

1. There must be an agreement
   • Confidentiality cannot be imposed unilaterally
2. The agreement must relate to actual confidential information
   • Not everything can be labeled confidential
3. Confidential information must be clearly identified
   • The burden is on the party seeking protection
4. There must be a breach
5. There must be real, quantifiable damage
6. There must be a direct link between breach and damage

Without all of these → no claim.

Practical Reality for Employees

Many employees are:

• Threatened
• Pressured
• Intimidated

…into signing broad confidentiality agreements.

These agreements often:

• Overreach
• Attempt to claim ownership over general knowledge
• Restrict future employment unfairly

But legally: if the employer cannot prove actual damage and causation, the agreement has little practical effect.

Final Thoughts

Despite how intimidating confidentiality agreements may look:

• Many are overly broad
• Many are unenforceable
• Most are not worth pursuing in court without strong evidence

The courts in the UAE are clear: allegations are not enough. Proof is required.

That is all for this episode of Lawgical. If you found this useful, you can find more on our website: lylawyers.com. We are also on Apple Podcasts and Spotify. And for the full experience, you can watch the video podcast on YouTube.

Until next time: stay informed, stay safe, and keep things Lawgical.