The plaintiffs sought various remedies against an ex-employee who had set up a company in competition with the plaintiffs. One was for breach of confidence in respect of a card index of customer contacts, a copy of which the first defendant had taken with him when he left the plaintiffs. That copy had been recovered on the execution of an Anton Piller order. Falconer J had granted various interlocutory injunctions, including an injunction restraining the defendants from entering into or fulfilling any contract with a person who had been approached by them at a time when they were in possession of the card index.
Held: The plaintiffs had a strong prima facie case of misuse of confidential information, and the injunction had been properly granted. Nevertheless the Court limited the duration of the injunction to one year, being the period of the restrictive covenant contained in the employment contract.
In general, all the employer’s information, the use or disclosure of which would harm the employer, is protected during employment whereas only trade secrets and information dishonestly obtained will be protected after employment ends.
Nourse LJ said: ‘it is necessary to start by restating, so far as they are material, the principles of law upon which an employer’s right to sue an employee for misuse of confidential information is founded. Those principles have, I believe, been clarified in the recent judgments of Mr. Justice Goulding and this court in Faccenda Chicken Ltd. v. Fowler [1985] 1 AER 724 and [1986] 1 AER 617. What is now clear, at all events in cases where there is no express agreement between the parties, is that the confidential information whose misuse is actionable at the suit of the employer may fall into one of two distinct classes. For present purposes it is convenient to state them in the reverse order to that in which they were stated in Faccenda Chicken v. Fowler. First, there are what this court compendiously described as trade secrets or their equivalent. They may not in any circumstances be used by the employee, either during or after the employment, except for the benefit of the employer. It was in order to protect information of that class that the second injunction was granted in the present case. Secondly, there is information which, although not falling into the first class, must nevertheless be treated as confidential by the employee in the discharge of his general implied duty of good faith to his employer. Such information may not be used by the employee during the employment except for the benefit of the employer but, if and only to the extent that it is inevitably carried away in the employee’s head after the employment has ended, it may then freely be used for the benefit either of himself or of others.
In the present case it is, correctly, not suggested by Mr Price, for the plaintiffs, that the information contained in the card index falls into the first of these two classes. He submits that it falls into the second class and that it is covered by the following passage in the judgment of this court which was delivered by Lord Justice Neill in Faccenda Chicken Ltd. v. Fowler [1986] 1 AER at page 625E:
‘(3) While the employee remains in the employment of the employer the obligations are included in the implied term which imposes a duty of good faith or fidelity on the employee. For the purpose of the present appeal it is not necessary to consider the precise limits of this implied term, but it may be noted: (a) that the extent of the duty of good faith will vary according to the nature of the contract (see Vokes Ltd. v. Heather); (b) that the duty of good faith will be broken if an employee makes or copies a list of the customers of the employer for use after his employment ends or deliberately memorises such a list, even though, except in special circumstances, there is no general restriction on an ex-employee canvassing or doing business with customers of his former employer (see Robb v. Green [1895] 2 QB 315 . . and Wessex Dairies Ltd. v. Smith [1935] 2 KB 80’
Mr. Fitzgerald did not, as I understood his argument, contend that the information contained in the card index did not prima facie fall into the second class of confidential information. I think it is clear that it did. Moreover, it is obvious that, if it is a breach of the duty of good faith for the employee to make or copy a list of the employer’s customers, the removal of a card index of the customers is an a fortiori case. ‘
Judges:
Nourse LJ
Citations:
[1987] ICR 464, [1987] IRLR 491, [1987] FSR 172
Citing:
Cited – Faccenda Chicken Ltd v Fowler CA 1986
Nature of Confidentiality in Information
The appellant plaintiff company had employed the defendant as sales manager. The contract of employment made no provision restricting use of confidential information. He left to set up in competition. The company now sought to prevent him using . .
Cited by:
Cited – SG and R Valuation Service Co v Boudrais and others QBD 12-May-2008
The claimant sought to require the defendants not to work during their notice period to achieve the equivalent of garden leave despite there being no provision for garden leave in the contracts. It was said that the defendants had conspired together . .
Cited – Universal Thermosensors Ltd v Hibben and Others ChD 8-Jul-1992
After complex litigation, the remaining issues were a claim for damages by the claimant in respect of the defendant’s misuse of confidential information and a counterclaim by the defendants for loss falling within the claimant’s cross-undertaking in . .
Cited – Vestergaard Frandsen A/S and Others v Bestnet Europe Ltd and Others ChD 26-Jun-2009
Arnold J reviewed the authorities and expressed his conclusion that an injunction will not be granted to prevent a future publication of information that has ceased to be confidential. He qualified this statement in relation to information that . .
Cited – British Broadcasting Corporation v Harpercollins Publishers Ltd and Another ChD 4-Oct-2010
The claimant sought an injunction and damages to prevent the defendant publishing a book identifying himself as ‘the Stig’ saying that this broke his undertaking of confidentialty as to his identity, a necessary part of the character in the TV . .
Cited – Caterpillar Logistics Services (UK) Ltd v Huesca De Crean QBD 2-Dec-2011
The claimant sought an order to prevent the defendant, a former employee, from misusing its confidential information said to be held by her. Her contract contained no post employment restrictions but did seek to control confidential and other . .
Lists of cited by and citing cases may be incomplete.
Employment
Updated: 01 May 2022; Ref: scu.270352
