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Executive Who Violated Ex-Employer’s Confidentiality Fined

A senior company executive who lied to the High Court when he categorically denied having breached the duty of confidence he owed to his former employer has come within an ace of being sent to prison for his contempt.

On leaving the company’s employ, the man signed a settlement agreement which contained comprehensive non-compete clauses and restrictions upon his use and dissemination of confidential information.

The company became convinced that he was violating those terms and launched proceedings. His response was to give formal undertakings to the court and to flatly deny in a sworn affidavit that he had breached the terms of the agreement.

However, conclusive proof subsequently emerged and the man accepted that his previous statements were false. He admitted that he had retained a USB stick on which a sales database and other confidential information were stored. He also accepted that he had disseminated a significant volume of information which was alleged to be confidential to two of the company’s competitors.

In the light of those developments, the Court entered summary judgment against the executive to the extent of his admissions. His dishonesty was, in principle, capable of passing the custody threshold. However, in the light of his frank admissions and expressions of remorse, the Court imposed a £1,000 fine.