29 June 2016
Looking at an alternative route to costly civil proceeding for confidentiality breach
When an employee leaves their employment, what are their obligations with regards to confidentiality, especially where there are no express terms in the employment contract? What can the employer do when confidential information is disclosed or shared?
During an employee’s employment it is implied into the contract of employment that the employee owes their employer a duty of confidentiality in relation to their employer’s business. Confidential information includes trade secrets such as customer lists, sales figures, research designs, etc. Information in the public domain is not considered confidential.
Employees will usually have express (written) terms of confidentiality or restrictive covenants in their contracts of employment. However, where there are no express terms, there are still implied duties of confidentiality. The implied duty of confidentiality continues even on termination of an employee’s employment. This includes not permitting employees to copy or memorise documents that are considered confidential once the employment relationship has ended.
The question we consider is what happens when an employer does not have any express terms of confidentiality or restrictive covenants in the employment contract, but believes a former employee has taken confidential information? And what happens if the employer does not want to spend significant sums of money pursuing civil proceedings against their former employee? In the case below the employer pursued the employee through an alternative route for such a breach.
The case: Lloyd and Acorn Waste Management
Mr Lloyd was one of Acorn Waste Management’s waste disposal employees. Before leaving his former employer and starting at a competitor’s business, he sent an email to his private email account, containing the details of over 900 customers. This included contact details, purchase history and commercially sensitive information. Mr Lloyd was prosecuted under section 55 of the Data Protection Act.
Mr Lloyd pleaded guilty to unlawfully obtaining data and was fined.
Steve Eckersley, head of enforcement at the ICO said: “Taking client records that contain personal information to a new job, without permission, is a criminal offence. Employees need to be aware that documents containing personal data they have produced or worked on belong to their employer and are not theirs to take with them when they leave. Don’t risk a day in court by being ignorant of the law.
Rosemarie McArdle, Assistant Head of our Employment Law Team, says:
“The case emphasises that employers do not necessarily have to pursue costly civil proceedings, but can consider taking alternative action against employees who have breached their obligations of confidentiality to their former employer.
It also highlights the wide reaching scope of Data Protection legislation in the UK. Initial reports suggest that this will grow very significantly if and when the General Data Protection Regulations come into force in May 2018.”
Still unsure? If you are a client, please speak to our Employment Law advice line on 0345 844 4848 for any further questions or to discuss alternative commercial options.
If you are not yet a client, please call our specialist business team on 0345 844 1111 to find out how having access to the Citation Employment Law Advice Line could keep you compliant, save your business money and help you flourish.
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