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Published 4 March 2021
Employers receiving information from new staff members should question whether they are on notice that the information is confidential to the previous employer.
Several sales consultants left the employment of the travel agent Trailfinders to work for a competitor, Travel Counsellors Limited. The High Court upheld a claim by Trailfinders that two of these ex-employees were in breach of implied terms in their contracts of employment and in breach of equitable obligations that they owed to Trailfinders because they had taken names, contact details, and other information about their clients to be used in their engagement with Travel Counsellors. The High Court also upheld Trailfinders’ claim that Travel Counsellors had acted in breach of an equitable obligation of confidence to Trailfinders because it had received information which it knew, or ought to have known, was confidential and it had used the confidential information for its benefit.
Travel Counsellors Limited appealed unsuccessfully to the Court of Appeal (the ex-employees did not appeal).
The Court of Appeal held that:
The judge stated that, if the circumstances are such as to bring it to the notice of a reasonable person in the recipient's position that the information, or some of it, may be confidential to another person, then the recipient should, depending on the context and the facts, make enquiries as to whether the information is confidential.
WHAT DOES THIS MEAN FOR EMPLOYERS?
Employers should be aware that they may be liable for using confidential information provided to them by new recruits. They should consider whether any information provided or used by new recruits might be confidential, and specifically enquire whether or not this is the case.
Travel Counsellors Limited and Trailfinders Limited, 2021 EWCA Civ 38
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