Posted by Richard Woodman, Partner
Employer fails in bid to obtain documents sent from work computers connected with team move to competitor
Ten senior managers left a leading healthcare consultancy to set up and join a business in direct competition with it.
The individuals, which included Capita’s former Executive Director of Health, were subject to express and implied duties of confidentiality, and were also prohibited from infringing Capita’s rights relating to its database of NHS clients and health services buildings.
A number of the contracts of employment also contained post-termination covenants. Capita alleged the individuals had, in breach of contract, joined together in a “Common Design”, and had unlawfully:
- set up Archus Ltd to compete with Capita
- solicited and induced each other and other employees of Capita to resign
- deleted their emails from Capita’s systems to conceal what they were doing, and
- accessed confidential information with the intention of assisting Archus Ltd.
Capita sought interim injunctions to restrain the individuals from working for Archus Ltd and using its alleged confidential information. Capita also requested that the court enforce the restrictive covenants, and order that the employees hand back “all documents and other records belonging to them.”
The draft order sought by Capita included a provision that the individuals forward to Capita’s solicitors, “copies of all emails that they have received into any non-Capita email account from any email account at Capita (including their own)”
Capita claimed the emails and/or their contents were its property and should be returned to it.
The individuals claimed that the Order was too broad, not limited in time, and that it was undefined by reference to any wrongdoing. They complained that the Order was also framed in such a way that it would require them to forward emails to Capita regardless of their content, which would include private and/or confidential personal information, such as emails containing holiday photos.
They also pointed out that Capita’s handbook permitted “reasonable” personal use of work computers.
What did the court say?
Although Capita had established a number of serious issues that needed to be tried, the court refused the Order. In respect of part of Order for delivery of documentation, the court held:
- the width of the order sought was excessive;
- damages were likely to be an adequate remedy for Capita;
- Capita did not need the emails to be able to take pragmatic steps to protect their business from future loss;
- The order would, or would be likely to, infringe the individuals’ right to respect for private and family life guaranteed by Article 8 of the ECHR;
- Capita’s argument that the emails and/or their contents were its property was not well founded. The judge did not consider that there was a proprietary right in respect of the content of emails, particularly personal emails.
It was noted that the application might have been successful if Capita (a) had used a different legal argument altogether which required production of documents from employees on the basis that they were acting on behalf of Capital as agents, and (b) had expressly requested the filtration of the employees’ personal emails from the documents.
Points for employers
The key concern for any company affected by a team move to a competitor will be to protect its confidential information and business interests. It will want to prevent the new employer from benefiting from such information, and to retrieve it as soon as possible. In most cases, it will also want to punish former employees for their unlawful actions.
This case highlights the various problems for employers in this situation. The court was not persuaded by any of Capita’s arguments. Regarding the application to retrieve emails which included personal ones sent to and from work computers, again the issue of an employee’s right to privacy was uppermost in the court’s mind.
This follows the recent court case of Bărbulescu v Romania, which held that an employer had breached an employee’s right to a private life under Article 8 of the European Convention of Human Rights by monitoring and reading personal emails sent via his work email account.
This case serves as a good reminder for well drafted clauses in employment contracts and settlement agreements, and policy documents. Careful consideration should be given to:
- protecting a company’s confidential information
- employees’ obligations of fidelity/fiduciary duties, including to report wrong doing
- monitoring and reading and/or listening to employees’ communications including personal communications on the business telephone or computer systems
- workplace practices regarding the use of business property for personal use
- employees’ obligations to return company property and irretrievably deleting company information following termination of employment
- post-termination restrictions to protect legitimate business interests.
These types of cases can be extremely damaging to a business, and call for specialist legal advice. For further information, please contact our Employment & HR team on:
0207 583 2222 Email us
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