The departure of a senior employee who has had access to confidential information is a frequent source of anxiety but, as a High Court case showed, a professionally drafted employment contract can be invaluable in putting such fears to rest.
The case concerned an IT and cyber-security company, one of whose account managers had resigned and taken a job with a competitor. Prior to leaving the company, he had sent an email containing confidential customer information to his private email address. He had also emailed 120 of the company’s prospective and current clients, announcing his departure. That, amongst other things, was said to be indicative of an intention to poach his former employer’s clients.
The man’s employment contract contained a number of restrictive covenants which required him to protect the company’s confidential information and to refrain from competing with it for 12 months after leaving its employ. After the company agreed to release him from his contractual obligation to serve out a three-week notice period, he had also signed a confidentiality declaration that reinforced those obligations.
The man denied having breached his contract or having any intention to compete with his former employer. In granting a pre-trial injunction against him, however, the Court was satisfied to a high degree that the confidential information referred to in his employment contract included details of client contacts and client needs.
The company had a real prospect of establishing that the confidentiality and non-compete restrictions in his contract were reasonable and enforceable and that they protected its legitimate business interests. Damages would not be an adequate remedy if the restrictions were breached and the balance of convenience fell in favour of granting the injunction.
The order required the man to meet the obligations contained in his contract and to deliver up any of the company’s confidential information in his possession. He was also ordered to make available any of his computers and other storage devices that might contain such information for forensic analysis by an independent expert. His new employer had already given undertakings to the Court that were designed to protect the company’s confidentiality rights pending a full trial of the action.
Caretower Limited v Posner & Ors. Case Number: HQ18X03018