Encrypt Time Machine backup data sent over the network
The easiest way to be sure that all your clients' backups are encrypted is to create an encrypted sparse (bundle) image using Leopard (10.5) on the server using hdutil. The newer versions of OSX should be able to read/write to the older encrypted volume without a problem. 

Here is an example using a Linux AFP server...
http://www.cognizo.com/2012/04/encrypted-network-backups-with-os-x-time-machine/

And another
http://bubba.org/wiki/Encrypted_Remote_Backups_with_Sparse_Bundles

This way all data encryption/decryption is done at the client end. Problem sovled.