Case update (2): Confidential information – post employment protection

social-mediaSummary: Will a Court make an order to allow an employer to inspect and take images from the personal computers of former employees?

Yes, in appropriate circumstances, says the High Court in Warm Zones v Thurley and another available here.

Facts: The employer, Warm Zones found evidence that its former employees, Ms Buckley and Ms Thurley, had misused confidential information from a customer database belonging to Warm Zones whilst they were employed. After their employment had come to an end, both Ms Buckley and Ms Thurley joined a competitor of Warm Zones.

Both Ms Buckley and Ms Thurley’s contracts of employment contained identical express confidentiality provisions which prevented them from using or disclosing any confidential information about the business of Warm Zones during their employment and after their employment had terminated.

Warm Zones applied for an interim injunction based on the improper use of the customer database and other related information. In particular, it sought an order for the inspection and imaging of their home computers.

The High Court allowed the injunction. It found Warm Zones’ evidence to be convincing and was sceptical of Ms Buckley and Ms Thurley’s evidence and credibility. In particular, the Court found that Warm Zones had invested several years and significant resources in compiling its “unique” database. Therefore, the database was deemed to have great commercial value given that it contained information that was not readily available to the public. The Court found that the injunction was a straightforward way to seek to protect the company due to the valuable information held on the database.

Further, Ms Thurley did not help herself as she initially agreed to an inspection of her computers but later changed her mind. Also, the Court was sceptical of the ex-employees’ explanation of emails which seemed to evidence that they were prepared to disclose the confidential information. These factors are likely to have contributed to the Court’s perception that Ms Buckley and Ms Thurley lacked integrity.

Implications:   It is unusual for a Court to order the inspection and imaging of ex-employees’ computers. However, as this case shows, if an employer’s evidence is strong enough and the data is sufficiently unique and valuable, it is possible to obtain such an order.

In light of the above, this case is a useful illustration of the steps that an employer may take, in appropriate circumstances, to protect its databases and confidential information. It also serves as a useful reminder to employers of the importance of carefully drafted confidentiality clauses and their effectiveness in protecting their business from harm following the departure of employees.