In the case of Weiss Technik UK v. Davies, the High Court extended legal protection for employers concerned to safeguard their confidential company information. Mere possession of information may be upheld as a breach of confidentiality.
The position before this case was that to establish a claim based on breach of confidence, the employer had to prove the information had been taken to a rival competitor and that information had been used, resulting in financial losses to the former employer. This burden of proof was a difficult barrier to overcome.
The High Court has taken a new approach to this problem and will now allow claims to stand where a claimant can prove the information has been taken. The High Court has stated that the claimant will no longer have the burden of proving that they suffered a loss due to the breach of confidence. The claimant must demonstrate the defendant deliberately and surreptitiously obtained and retained another’s confidential information.
Employers will benefit from this decision because they will be able to take immediate action against an employee if the relationship becomes strained and the employee leaves, taking confidential company information with them. Employers will also be able to rely on the decision when applying for pre-emptive injunctions. This is to prevent the misuse of confidential information before an employee causes any harm to the business. Damages and legal costs will be assessed by the court.
The case serves as a reminder to employers to ensure they have their confidentiality clauses reviewed. It also serves as a warning to employees who are thinking about breaching the terms of their employment contract during or after employment.
The facts of the case are fascinating to read. The employee, Mr. Jones, left his employment with Weiss. He set up his own company, SJJ, in competition with his former employers. The employers presented a substantial amount of evidence that proved that he had taken confidential information. He stole USB sticks with passwords to software and the customer database. Another defendant, also an employee of Weiss, had sent Mrs. Jones confidential information to enable him to provide competitive quotes to Weiss customers.
To determine if there had been a breach of confidence, the judge carefully considered the terms of the employment contract and handbook. The Defendants' beach of confidence was upheld by the High Court. The judge said, "It is not necessary to show that confidential information was specifically used by SJJ for the purposes of its business." It is sufficient that Mr. Jones and SJJ deliberately and surreptitiously obtained and stored documents that were, or ought to have been, appreciated by the defendants to be confidential to Weiss.
This article is intended as a guide. Employers are advised to call the dedicated HR helpline for specific advice and guidance.
