The information disclosure obligations of listed companies play an important role in maintaining the order of the securities market and protecting investors' rights and interests. However, such disclosure has limits.

The Beijing Internet Court (BIC) adjudicated a case involving the infringement of the right to privacy through an information disclosure by a listed company. The BIC clarified that listed companies must balance public interest with individual privacy rights. Disclosing ordinary employees' salary information without reasonable justification constituted an infringement of the employees' right to privacy. This case delineates the boundary for listed companies to protect individuals´ personality rights when fulfilling their disclosure obligations.

Case summary

The defendant, a technology company, is listed on the ChiNext board of the Shenzhen Stock Exchange. The plaintiff, Jia, previously worked at the company as a UI/UE team leader, was responsible for graphic design and team coordination. A labor dispute arose between the plaintiff and the defendant.

In August 2021, a court made the first-instance judgment on the labor dispute, ordering the defendant to pay the plaintiff more than 200,000 yuan ($28,402.64) in compensation for the illegal termination of the labor contract, as well as the plaintiff's wages from Dec 1, 2019, to Jan 7, 2020.

Between August 2021 and March 2022, several documents, including prospectuses and legal opinions, were published on the Shenzhen Stock Exchange's website, fully disclosing the plaintiff's full name, the judicial proceedings and the ruling in the labor dispute case. These documents were subsequently reposted by other websites. During this period, the labor dispute was still under the second-instance trial, and the judgment had not yet taken legal effect.

The plaintiff filed a lawsuit on the grounds of infringement of his right to privacy and personal information rights, claiming that the defendant had uploaded on the internet his private salary information, specifically his wages from Dec 1, 2019, to Jan 7, 2020, and this information was then disseminated on many other websites.

This caused significant distress to the plaintiff's work and life, infringing his rights to privacy and personal information. Therefore, the plaintiff requested the court to order the defendant to anonymize his information in relevant disclosures, issue an apology, and compensate him for emotional distress.

The defendant argued that its labor dispute with the plaintiff constituted litigation or arbitration that could have a significant impact on the company and therefore fell within the scope of mandatory disclosure. The defendant claimed that the disclosure was made to fulfill its obligations stipulated in the Securities Law and other relevant laws and regulations. Therefore, it did not infringe the plaintiff's legitimate rights and interests.

After hearing the case, the BIC determined that, the plaintiff's salary constitutes private information protected by the right to privacy.

Under Article 1032 of the Civil Code a natural person enjoys the right to privacy, and that no organization or individual may infringe upon the other's right to privacy by prying into, intruding upon, disclosing or publicizing other's private matters. Privacy is the undisturbed private life of a person and his private space, private activities and private information that he does not want to be known to others.

Article 1034 stipulates that a natural person's personal information is protected by law. The provisions on the right to privacy, or, in the absence of which, the provisions on the protection of personal information, shall be applied to the private personal information.

Under China's existing legal systems, the protection of an individual's right to privacy and the protection of personal information right overlaps while remaining distinct. In this case, it is essential to determine whether the plaintiff's salary information is private or personal information.

Private information refers to the non-public individual information that is irrelevant to the public interest and other citizens' lawful rights and interests.

In this case, the plaintiff's salary information reflected his financial situation, and indicated his income and capability, thereby relating closely to his private life. Objectively, the plaintiff's salary information was in a confidential state, known only to himself and certain personnel at the company. Although the salary information was recorded in the judgment of the labor dispute, the judgment had not been publicly disclosed when the defendant disclosed the plaintiff's salary information; the confidential nature of this information remained unchanged. Subjectively, the plaintiff did not wish for others to know his salary information, which was in consistent with the general public's attitude toward salary and does not violate laws or public morality.

Therefore, the plaintiff's salary information was considered private information and should be protected under the provisions on the right to privacy in the Civil Code, rather than those on personal information protection.

The defendant's disclosure of the plaintiff's salary information infringed on his right to privacy.

Article 1033 of the Civil Code provides that, unless otherwise provided by law or expressly consented to by the right holder, no organization or individual may engage in acts that infringe others' right to privacy.

Article 78 of the Securities Law stipulates that issuers and other parties who are bound by a disclosure obligation as provided for by laws, administrative regulations and the securities regulatory department under the State Council shall perform the obligation of information disclosure in accordance with the law in a timely manner. Information disclosed by the parties under the disclosure obligation must be truthful, accurate, complete, concise and clear and easy to understand, and must not contain any false records, misleading statements or major omissions.

Relevant departmental regulations and normative documents further require securities issuers to disclose criminal proceedings, major litigation or arbitration matters that may affect the issuer. The Rules Governing the Listing of Stocks on Shenzhen Stock Exchange provides a more detailed list of litigation and arbitration that must be disclosed. These provisions constitute statutory exception to prohibition against infringement of privacy rights stipulated in the Civil Code.

However, the right to privacy, as an important and fundamental component of personality rights, is based on the value of human dignity. Therefore, when issuers fulfill their disclosure obligations, they must adhere to the principles of legitimacy, necessity and good faith, minimizing any adverse impact on others' privacy rights.

In this case, the plaintiff was an ordinary employee of the defendant company, and the dispute between the parties was a labor dispute involving an amount of just over 200,000 yuan. From the perspectives of the amount, the nature of the dispute and its substantive content, the dispute did not fall within the category of major litigation or arbitration listed in the Shenzhen Stock Exchange Rules. Therefore, the defendant's disclosure of the plaintiff's salary information exceeded reasonable limits and lacked legality and necessity, infringing the plaintiff's right to privacy.

Details of the ruling

The court ruled that the defendant must anonymize the plaintiff's information in the relevant documents, issue a formal apology to the plaintiff and compensate for emotional distress.

After the first-instance judgment, the defendant filed an appeal. The Fourth Intermediate People's Court of Beijing Municipality dismissed it and upheld the original judgment.

Tips from the judge

Private information refers to the individual information that remains in a confidential state, is unknown to others, and is unrelated to the public interest or the lawful rights and interests of others. Salary information is tightly connected to an individual's private life, is known only to a limited group of people; and is generally not information that individuals wish to disclose. Therefore, salary information is private and should be protected under the right to privacy.

When fulfilling information disclosure obligations, securities issuers must adhere to the principles of legality necessity and acting in good faith. In disclosing information involving private information or other personal information, they should adopt the methods that have the least impact on others' lawful rights and interests.