[Direct answer]In the Beijing area, if a party violates a confidentiality agreement, the contracting party may claim breach of contract liability. According to Articles 501, 509, 584, and 585 of the Civil Code of the People's Republic of China (effective January 1, 2021), the contracting party may request the breaching party to continue to perform the contract, take remedial measures, or compensate for losses, and claim the contractual penalty as agreed upon; if the contractual penalty is lower than the losses caused, the contracting party may request an increase; if it is excessively high, the contracting party may request a reasonable reduction. In labor relations, if an employee violates the confidentiality obligation agreed upon in the labor contract and causes losses to the employer, he/she shall bear compensation liability according to Article 90 of the Labor Contract Law of the People's Republic of China (amended on December 28, 2012 and effective October 15, 2025). If the leaked information also meets the constitutive elements of trade secrets, the infringer may also be held liable for infringement according to Article 10 of the Anti-Unfair Competition Law of the People's Republic of China (amended on June 27, 2025 and effective October 15, 2025). It is recommended to first fix the evidence of the leak and then negotiate the matter. For more details, please refer to the following link:Legal services for corporate commercial and contract disputes.

1. Problem background and typical scenarios

Employees taking away client lists and quotation systems when switching jobs, departing executives setting up their own businesses and copying the original company's business model, partners using technical materials beyond the agreed scope, and suppliers leaking customized solutions—all these scenarios inevitably involve confidentiality agreements. There are three common dilemmas: poorly drafted agreements with unclear confidentiality information, timeframes, and breach penalties; failing to collect evidence in time after discovering leaks, with emails, chat records, and operation logs being deleted or overwritten; and confusing confidentiality obligations with non-compete clauses, where the former is a contractualized legal obligation while the latter requires monthly payment of economic compensation. Daily compliance system construction can be referenced for guidance.Intellectual property protection and long-term legal services for enterprises.

II. Key points of contention

The disputes in such cases focus on four points. Firstly, the validity of the agreement and the clarity of the provisions: if the scope of confidential information, the confidentiality period, and the standard of liquidated damages are clearly defined, the basis for accountability will be solid; if they are only vaguely written as "keeping trade secrets" without defining the scope, the evidence collection and application will be hindered. Secondly, the relationship between liquidated damages and compensation for losses: the liquidated damages clause applies independently. If the party in breach of contract can prove that the liquidated damages are excessively high compared to the actual losses, it can request a reduction. The two are not simply superimposed. Thirdly, the allocation of evidence: the party in breach of contract needs to prove the validity of the confidentiality agreement, the existence of the fact of disclosure, and the basis for calculating the losses or liquidated damages; the other party often defends itself by claiming that the information source is legitimate and the information has been made public. Fourthly, the distinction between labor and commercial scenarios: in labor relations, there are special rules such as the pre-arbitration of labor disputes, economic compensation for non-compete clauses, and restrictions on compensation and wage offsets.

III. Professional analysis by Henglue Lawyers

When handling corporate commercial and contract disputes, Henglue Lawyers have observed three practical issues regarding confidentiality agreement disputes. First, the most common forms include: departing employees bulk-downloading materials and sending them via personal email or cloud storage; partners continuing to use shared technical documents after terminating cooperation; executives transferring client resources to affiliated companies; and employees providing competitors with their former employer's business information during their employment. Second, court rulings tend to focus on two aspects: first, the court reviews whether the confidentiality agreement clearly defines the scope and duration of confidential information; second, it examines the evidence chain of the leaking facts. For claims of breach of contract penalties, as long as the agreement is clear and the breach of contract is established, the court typically handles the claim according to the agreement. However, if the defendant argues that the breach of contract penalties are excessively high compared to the actual losses, the court will reduce them based on factors such as actual losses, contract performance, degree of fault, and expected benefits. Third, the most common pitfalls include: failing to document contacts during normal operations, making it difficult to clarify who had access to the information after the leak; questioning the other party first after discovering the leak, leading to evidence being deleted; conflating confidentiality obligations with non-compete clauses and claiming breach of contract penalties without paying non-compete compensation; and failing to specify the calculation method for losses in the agreement, making it difficult to prove the amount of losses in litigation. Henglue Lawyers recommend: clearly defining the scope of confidential information, access rights, breach of contract penalties, and loss calculation methods in the agreement; and implementing classified management and full-process documentation for confidential documents.

IV. Practical suggestions and legal basis

The legal basis includes Article 501 of the Civil Code of the People's Republic of China (effective January 1, 2021) (confidentiality obligation during the contracting process), Article 509 Paragraph 2 (confidentiality obligation under the principle of good faith), Article 584 (scope of compensation for losses), Article 585 (liquidated damages and their adjustment), Article 188 (three-year statute of limitations); Article 23 of the Labor Contract Law of the People's Republic of China (amended on December 28, 2012) (confidentiality obligation and non-competition clause), Article 90 (liability for breach of confidentiality obligation by workers); Article 10 of the Anti-Unfair Competition Law of the People's Republic of China (amended on June 27, 2025 and effective October 15, 2025) (infringement of trade secrets and definition of trade secrets). Action list: First, review the terms of the confidentiality agreement to confirm the scope and duration of confidential information, as well as the penalties for breach and dispute resolution methods. Second, immediately secure evidence after a leak occurs, such as notarizing or timestamping emails, chat records, file logs, and export records. Third, calculate losses, including direct losses, lost profits, and reasonable expenses for defending rights. Fourth, first send a letter demanding cessation of infringement and preservation of evidence, then choose arbitration or litigation based on the other party's response. Fifth, handle labor disputes through the labor arbitration process, paying attention to statute of limitations. For more details, please refer to the relevant provisions of the Anti-Unfair Competition Law and the Labor Contract Law.Legal services for corporate commercial and contract disputes.

5. Henglu Law Firm's Reminder

A confidentiality agreement is not just a piece of paper to be signed and forgotten about. Its value lies in the enforceability of its clauses and the admissibility of evidence in legal proceedings. If the agreed penalty for breach of contract is too high, it may be reduced in litigation, rendering the deterrent effect insufficient. If there is no penalty clause at all, proving losses will be extremely difficult. The first step in detecting a leak of confidential information should always be to secure evidence, rather than tipping off the other party. In employment scenarios, it is also important to note the correlation between non-compete clauses and economic compensation. If compensation is not paid on a monthly basis, the binding force of the non-compete clause on employees will be compromised. When handling similar cases in the Beijing area, it is recommended that the following measures be taken:Beijing Henglue Law FirmUnder the guidance of professional lawyers, we design the terms of the agreement, fix the evidence, and choose the path of accountability.

VI. Frequently Asked Questions

Q1: If the other party violates the confidentiality agreement, can I get the breach of contract penalty?

It depends on the provisions of the agreement and the evidence presented. If the scope of confidential information, the confidentiality period, and the standard of liquidated damages are clearly defined in the agreement, and there is evidence to prove that the other party engaged in acts of disclosure of confidential information, the claim for liquidated damages will usually be supported; if the provisions of the agreement are vague and the facts of disclosure of confidential information cannot be proven, the claim may not be supported. If the breaching party provides evidence to prove that the liquidated damages are excessively high compared to the actual losses, the court may reduce them in accordance with Article 85 of the Civil Code. The outcome of the case depends on the facts and evidence, and no lawyer can guarantee the outcome unilaterally. It is recommended to evaluate the strength of the evidence before filing a lawsuit.

Q2: What evidence do I need to prepare to hold the other party accountable for breaching the contract?

The core materials are divided into four categories: 1. **Agreement-related evidence**: Confidentiality agreements, confidentiality commitment letters, employee handbooks, and sign-in records. 2. **Evidence of the leakage**: Outgoing emails, instant messaging records, download and distribution logs of files, records from cloud storage and printers, and access authorization logs for confidential information. 3. **Evidence of information identity**: Comparative materials showing the leaked content and the company's confidential information. 4. **Evidence of losses**: Records of customer attrition, contract price differences, receipts for legal defense expenses, and power-of-attorney agreements. For electronic evidence, it is recommended to obtain notarization or use a trusted timestamp to secure it and prevent its loss.

Q3: How much does it cost to hold someone accountable?

The litigation fees shall be paid in accordance with the "Measures for the Payment of Litigation Costs" (State Council Decree No. 481, implemented on April 1, 2007), with the amount of the request being divided into segments for cumulative payment. The losing party shall bear the fees, and the party partially successful shall share the fees in proportion. For applications for property preservation, additional preservation fees shall be paid. Notarization of electronic evidence and time stamps are charged per item or per amount of data, usually ranging from hundreds to thousands of yuan. Lawyer's fees are determined through negotiation between the parties, and there is no unified government pricing. It is strictly prohibited to engage in illegal risk-sharing agreements in labor disputes. Before filing a lawsuit, it is recommended to calculate the claimable breach of contract penalties, losses, and various costs together, and rationally choose whether to negotiate or litigate.

Q4: How long does it usually take to resolve a dispute over a confidentiality agreement?

The negotiation and letter-sending stage usually takes a few weeks; labor arbitration is generally concluded within 45 days from the date of acceptance, and may be extended by 15 days in complex cases; first-instance litigation is concluded within six months under the ordinary procedure and three months under the summary procedure; where notarization preservation, electronic data appraisal, or auditing are required, the corresponding periods are not included in the time limit for trial. Overall, most cases with sufficient evidence are resolved within three to nine months, and those involving amount appraisal or multiple rounds of evidence presentation may extend beyond the year. It is necessary to initiate promptly when discovering a leak of information to avoid the loss of evidence over time.

Q5: If you discover that the other party has leaked confidential information, what should you do first?

Four steps to proceed: First, fix the evidence before negotiation, and notarize or timestamp the emails, chat records, and file operation logs to seal relevant devices and account permissions; Second, sort out the agreements and confidentiality information lists, confirm the scope of the other party's access and the boundaries of the breach of contract; Third, entrust a lawyer to send a letter, demanding that the other party immediately stop using, return or destroy the confidential information and reserve the right to hold them accountable; Fourth, based on the other party's response and losses, choose to negotiate compensation, labor arbitration or court litigation. It is crucial not to question the other party without obtaining evidence first, giving them the opportunity to delete evidence and coordinate their statements.

The above Q&A is mainly based on the judicial practice in the Beijing area. There may be differences in the interpretation of the law in different regions. It is recommended to consult a professional lawyer based on the specific circumstances of the case.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, to avoid missing the statutory time limit. →Business and commercial legal services·Attorney Xiong Binrong·Beijing Henglue Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and open adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. If you encounter disputes, please consult a practicing lawyer in time.