Skip links

Employee Breach of Confidentiality Dispute

In circumstances where a worker copied his employer’s documents onto a USB stick shortly before resigning and taking up a new position with a direct competitor, the High Court has set limits on the scope of argument in respect of alleged breaches of confidentiality (Churchill Retirement Living Limited v Luard and Others).

Oliver Luard, who worked as an assistant land buyer for a property development company that provided private retirement accommodation, had admitted copying the information and taking it with him when he left. He had also admitted that, during a period of garden leave, he had contact with a competing company that subsequently employed him. However, he denied making improper use of any confidential information.

His former employer was granted an interim injunction restraining unauthorised communication or use of any confidential information. However, a search of the worker’s personal computers had failed to reveal any evidence of any further copying or use of the company’s documents.

The High Court found that, on the basis of his admissions, the employee’s actions amounted to a breach of contract and/or confidentiality. However, it struck out elements of his former employer’s claim on the basis that some of the information to which it related was of a general, non-proprietary, nature and any confidentiality that attached to it did not extend beyond the end of the employment contract.

In the Court’s view, the mere disclosure of the fact that the former employer was engaged in negotiating for the purchase of particular land holdings was not sufficiently confidential to be in the nature of a trade secret. However, it was arguable that precise details in respect of such negotiations, pricing and potential profit margins were protectable as confidential information after the end of the worker’s employment. Whilst accepting that the worker’s conduct had been ‘suspicious’, the Court ruled that his former employer had failed to establish an arguable case that he had disclosed any alleged confidential information sufficient to cause a loss.