Employment contracts are central to keeping secrets for your eyes only

Oct. 26, 2012 - PRLog -- A recent case brought by Churchill Retirement Living Limited has shown how important it is to specify in contracts exactly what actions are prohibited to an ex-employee if companies want to protect confidential information and have the courts on their side when doing so.

A former employee of Churchill copied a list of contacts plus information about two potential retirement development site purchases onto a memory stick before he left Churchill to join a competitor. On discovering this, Churchill applied to the courts for an order prohibiting the employee from using the list of contacts and from contacting anyone who appeared on it.

Churchill also asked for an order to stop the new employer making a move on either of the potential development sites they had ear-marked. When the judge agreed that taking the contacts and site information could amount to breach of contract or confidence and granted an order prohibiting the ex-employee and new employer from ‘using’ the contacts, Churchill thought the judgement would go their way.

However, the judge refused to order they must not make contact with the persons on the list, because that situation had not been covered by Churchill’s contract of employment. Likewise, the judge would not grant an order to stop the new employer purchasing the sites.

Despite Churchill’s argument that this was highly confidential information (because the properties were not for sale on the open market and the sale was not publicly known), the judge merely ordered the new employer must not use any information relating to Churchill’s profit margin on any site.

The judge went on to say if Churchill suffered a loss on the sites as a result of the breach of confidence, the loss would be purely financial and easy to calculate, so a compensation claim would be straightforward.

“This case shows tightly written contracts of employment remain vital where staff have access to highly confidential information,“ said Oxley & Coward Employment Law specialist Amy Cusworth. “The contract must specifically prohibit actions such as copying and removing confidential information, while prohibiting any contact with clients or other connections of the employer for a specified period after the employment has come to an end.”

“If it is clear an action is in breach of contract, then employers will find the courts more likely to grant orders with real bite when dealing with cases involving breach of confidence,” added Amy.

For further information and advice on Employment Contracts, contact Oxley & Coward Solicitors on 01709 510999, or visit www.oxcow.co.uk