It never ceases to surprise me that employees can be so horrified when action is taken against them following the misappropriation and/or misuse of information belonging to an employer. All employment contracts incorporate an implied duty to keep confidential information belonging to the employer and not in the public domain. Confidential information in the nature of a trade secret, such as financial information, customer lists, production processes and sales strategies is protected. Further, any decently drawn contract of employment will include express protection of confidential information, both during and after employment.
If an employer has good reason to believe that confidential information has been misused, for example by disclosure to a competitor or by a former employee diverting business away from the company, there is a clear risk that serious damage could quickly follow. Consequently, it is often thought appropriate to apply for an injunction requiring the current or former employee (and any of his or her associates) to stop using the information and to deliver up the information in whatever form it has been taken. In order to prevent action being taken to thwart the employer’s efforts (e.g. by hiding away the information) injunctions are often granted without notice to the party to be served.
I recall some years ago making a home visit to a suburban address early one morning. The purpose of the visit was to carry out the terms of an injunction order requiring the delivery up of property belonging to the employer. A supervising solicitor from another firm was in attendance to ensure that correct procedures were followed. The recipient of the order was shocked to find out that the order covered delivery up of all physical documents at the house and, in addition, all electronic devices that could hold information belonging to the company including PCs, mobile phones and even the children’s laptops. Technological advances have served to widen even further the scope of disclosure to include, for example, documents stored in the cloud through Google, OneDrive, Dropbox or any number of other providers. It has also come to the attention of many employers that, particularly in the online world we nearly all inhabit, relevant data is one of their most important assets.
The recent High Court case of Warm Zones v Thurley and Buckley includes a useful summary of the relevant factors to be taken into consideration when considering such an application and confirms the willingness of the court to make an order in appropriate cases.
Warm Zones is a not-for-profit company that provides energy efficiency and related advice for domestic users, targeting principally low income and vulnerable households throughout the UK. Ms Thurley was a zone director from January 2007 until she was dismissed in March 2013. She covered addresses in North Staffordshire and Cheshire West. Mr Buckley worked as an IT and project manager, also based in North Staffordshire. Both had access to the employer’s database for the region containing, according to Warm Zones, “important, unique confidential information and property belonging to it”.
Both employees were subject to contracts including the following:
15.1 You shall not use or disclose to any person either during or at any time after your employment with the Company any confidential information about the business or affairs of the Company or any of its business contacts, or about any other matters which may come to your knowledge in the course of your employment. For the purposes of this clause 15 confidential information means any information or matter which is not in the public domain and which relates to the affairs of the Company or any of its business contacts, client and/or customer information and/or any information relating to the finances of the Company and, in particular that information concerning the company’s Financial and Partnership arrangements.
Ms Thurley was dismissed for gross misconduct in March 2013 and brought a tribunal claim alleging unfair dismissal. However the facts in connection with that claim are not relevant for the purposes of the injunction application. Mr Buckley resigned and left the employer at the end of March 2013.
It emerged in the employment tribunal proceedings that Ms Thurley had subsequently worked for UK SS Renewal Energy Services Limited (RES) and she also brought a claim against that Company following the termination of her employment. This led to communication between Warm Zones and RES and the disclosure of documents including an email in which Ms Thurley stated “the databases and information technology I hold provides other opportunities for business development and targeting market sectors”. In another email exchange she said she could “bring in [her] tender file with approx. 80 submissions”.
In a separate email exchange Mr Buckley sent an email to RES in which he stated that he had a list of leads including 5,200 addresses. Added to other evidence Mrs Justice Simler was satisfied that Warm Zones had made out a serious case to be tried. Damages would not provide an adequate remedy for Warm Zones, not least because there was a serious risk that the defendants would be unable to pay. On balance it was appropriate to grant an injunction, subject to assurances concerning the protection of client confidential and third party information not belonging to Warm Zones.