Comment 3 for bug 831604

I think it would need to encrypt the home directory at the same time it creates it. I guess this is what the system adduser script does with its --encrypted-home option.

I'm not sure the details of what adduser does, but I think it may just do 'ecryptfs-migrate-home' after it makes the dir. The following links are relevant:

http://blog.dustinkirkland.com/2011/02/long-overdue-introduction-ecryptfs.html

https://help.ubuntu.com/community/EncryptedHome#Encrypted_Home