1. Central Asia:
Tackling trade secret leaks
by former execs
by Usmon Kuchimov & Igor Pak
CASE STUDY:
Following disagreements with the founders of a well-known
publishing house in Uzbekistan, a former director establishes his
own company in the same industry. The director uses a secret
client database belonging to his employer, and contacts every
single client saying that the newly established company is the
result of transformations within the original publishing house.
In accordance with the misleading information sent out by the
former director, most of the clients transfer their contracts to the
new corporation. Upon learning of this fact, the publishing house
claims damages through the courts against both the director and
the new company for the significant loss suffered.
The court rules that the corporation has used the confidential
client database without the permission of its legitimate owner,
which constitutes unfair business practice. The court further
confirms the former employer’s right to claim damages caused by
its former executive, and orders the latter and the new company
to reimburse these losses.

2. In most Central Asian countries,1
the protection of trade secrets is
regulated by special laws.2
The region’s civil legislation contains
principles3
that stipulate that commercial information can be
granted legal protection, provided that (a) it has actual or potential
commercial value resulting from its lawful confidentiality with
regard to third parties, and (b) access to the information is
restricted by measures implemented by its owner to ensure its
confidentiality.
As such, any employer may have the right to protect its trade
secrets if the required measures were taken to restrict free access
to the secured information and prevent the unlawful possession of
the information by former employees. The right to such protection
is not limited by time and remains valid for as long as the
information requires confidentiality. At the same time, an
employer is not required to undertake any additional "external"
formalities, such as completing any registration or obtaining
certificates.4
It follows that an employer operating in the region may rely on the
statutory protection of its trade secrets with regard to departing
employees, and can do so by implementing the following
measures for keeping sensitive information confidential.
An entity must have a specific list of information that contains
or constitutes trade secrets. The employee must be aware of
the confidential nature of any such information under his/her
use and must confirm his/her awareness of this
confidentiality with a valid signature. Meanwhile, it is worth
to note that regional laws establish what kind of information
cannot be classified as secret (such as information that is
subject to mandatory publication, is contained in a charter5
of a legal entity, relates to its corporate registration, or to
transactions involving real estate and the registration of
ownership titles over the real estate, etc.).
The employee’s access to the information must be controlled
and well monitored. In the event of a dispute, the employer
must provide the courts with sufficient documentary
1.
2.

3. evidence that the employee had access to the confidential
information (for example, a printout of email
correspondence). There are many available technical and IT
solutions for monitoring employees’ access to such
confidential information. A security department can also
conduct monitoring and control over the use of the entity’s
confidential information.
There is a strong need to address the issue of information
security in writing in order to set clear contractual obligations
and employee responsibility whilst safeguarding
confidentiality. Labour relations with employees are
primarily governed by labour contracts and the provisions
contained therein. The protection of the confidentiality of
information is a priori of the employee’s duties.6
As a matter
of law, employment agreements may contain the
responsibilities of employees with regard to preserving the
confidentiality of corporate information.
Having said that, the law does not exclude the possibility of
signing additional agreements such as NDAs that fall
outside of the employment relations of the parties. The
presence of such an agreement will ensure the employee’s
obligations even after the termination of his/her
employment with the employer. For example, from 2016 in
Kazakhstan an employer and employee may enter into a
non-competition agreement, whereby the employee
undertakes not to carry out any actions that may potentially
harm the employer.7
Access to the protected information must be blocked before
an employee leaves the company. As we know, information
tends to lose its relevance. Former employees often turn to
competing entities with their "fresh" confidential knowledge,
which is one of the motivations for attracting such
individuals. To prevent such practice, employers in western
countries have long since been implementing "gardening
leave".8
However, the legislation of countries in the Central
Asian region does not allow the application of gardening
leave in its pure form.
3.
4.

4. As an alternative, the employer may agree upon relevant
clauses in an employment agreement that provides for
additional leave following the departure of an employee.
Save for Uzbekistan, the law does not set limits on the
duration of such leave;9
nonetheless, the employee is
entitled to remuneration of an amount no less than his/her
average earnings.
The employer is advised to conduct an exit interview with key
employees and to inform or remind them of restrictions on the
use of confidential information in years to come. Considered
as an internal communication instrument, the "farewell"
interview does not only place emphasis on the importance
of information security, but will also reveal weaknesses and
inconsistencies in internal communication. Personal
conversations may reduce any negative feelings that
dismissed/departing employees might have. This is
absolutely essential when the employer initiates the
dismissal and employees are at risk of engaging in public
actions that may damage the former employer’s business.
Hiring detective agencies is one way to ensure information
security and manage an immediate response to a potential
leakage. Private detectives are helpful in establishing the
circumstances and collecting evidence of the unauthorised
use of trade secrets. In Tajikistan and Kyrgyzstan, the
operations of private detective agencies are legalised on a
legislative level, whereas in Uzbekistan and Turkmenistan
such business operations are prohibited by law. In the
context of Kazakhstan, legislation does not regulate the
activities of private detective agencies.10
In general, in all the jurisdictions under discussion here any
evidence obtained by unauthorised parties is inadmissible in
the event of court proceedings. As a matter of urgency, the
employer may address a written request to law enforcement
bodies or a prosecutor's office seeking assistance in
resolving issues with negligent employees. An employee
who has illegally received, distributed or used trade secrets
may be subject to civil, disciplinary, administrative and even
criminal liability. The application of multiple types of liability
6.
5.

5. is allowed. After the employee’s dismissal, within the
framework of civil law the employer is entitled to claim (a)
the remuneration of damages; and (b) the immediate
termination of the use of confidential information.
The employment laws of countries in the region apply to
both local and foreign workers. The lack of qualified local
staff frequently leads investors to hire foreign experts
("expats") for local key positions. Meanwhile, investors are
advised to appoint expats who are permanent residents in
common law countries (where the concept of confidential
information and its legitimate protection is well developed)
or countries with strong and effective enforcement of rulings
from common law jurisdictions.
In conclusion, the legislation of the countries in the region protects
confidential information of commercial entities from unauthorised
use by their own key employees. However, this does not relieve the
employer from the obligation to ensure the well-planned and
effective management of their labour relations with employees,
who, in turn, should protect confidential information during the
hiring process, in the course of their employment and upon their
dismissal.
1
This paper covers the legislation of Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan.
2
Regardless of this, the protection of trade secrets is also regulated by various normative acts
contained in numerous legislative acts adopted at different dates.
3
The Law on “trade secrets”, Article 3, para 2 (Uzbekistan); Article 2 (Kyrgyzstan); Article 10, para 1
(Tajikistan), and the provisions of the Entrepreneurial Code of Kazakhstan (effective as of January
2016).
4
Civil Code of Uzbekistan, Article 1095, para 2.
5
The charter is an analogue of Articles of Association of a company.
6
See, para. 3(b) of Article 11 of Law “On trade secret” of Tajikistan.
7
Article 29 of the Labour Code (LC) of Kazakhstan; Article 8, para 2 of the Law “On trade secrets”
(Kyrgyzstan).
8
“Gardening leave” – defined as the practice of prohibiting an employee from accessing their
employer’s premises during their notice period. Instead, the employee is paid their full salary to
stay at home.
9
The law stipulates that the parties may include additional guarantees (other than those
guarantees provided by the legislation) in the employment agreement (LC of Uzbekistan, Article 4).
However, it should be noted that the total number of annual leave days (primary and additional)
may not be more than 48 business days (LC of Uzbekistan, Article 140, para 2).
10
The Kazakh parliament initiated the adoption of a law regulating the operations of private
detective agencies; however, it has not yet been implemented.
7.

6. Colibri advises within the jurisdictions of Iran, Kazakhstan,
Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan, Iran and is one
of the largest law firms in the region. The firm’s core team has
been established in 2005 and since then has been advising on
banking and finance, energy, M&A, and infrastructure projects
across the region.
www.colibrilaw.com
Igor Pak igor.p@colibrilaw.com
Igor is an associate. Focusing his interest and expertise mainly
on issues of corporate, investment and project finance for
renewables, energy and subsoil industries, Igor graduated from
one of well-known program at Tulane Law School. Prior to
joining our team, Igor practiced law for several international
companies in Uzbekistan, and consulted on projects on
transboundary waters with the World Bank in Washington D.C.
Usmon Kuchimov usmon.k@colibrilaw.com
Usmon is an associate in the Uzbekistan office of Colibri. His
main practice areas are corporate and commercial. Prior to
joining our team Usmon worked in leading multinational
telecommunication company and international automotive
corporation. Having graduated from Bucerius Law School and
WHU School of Management in Germany, he mainly focuses
on corporate relations, employment, licensing and permits.