10th September 2010
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This month
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Legal updates
- Variation to contracts of employment
- Discriminating against younger employees
- Confidentiality restrictions on ex-employees
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Case archive
Enquiries
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Confidentiality restrictions on ex-employees
Crowson Fabrics vs Rider
EWHC/2942 HC
Key facts
Rider was one of two employees without post-termination restrictions in their contracts relating to competition or the use of confidential information. Prior to leaving Crowson’s employment to set up in direct competition, they e-mailed Crowson’s customers to solicit business and when they left took with them a suppliers ‘bible’ of contact details for all suppliers. When they became aware of the competition from Rider, Crowson pursued them claiming that they had breached their implied duties of confidentiality and fidelity, they had breached their fiduciary duty and breached Crowson’s database under the Copyright and Rights in Database Regulations 1997.
Decision
Rider had already returned the physical copy of the supplier’s ‘bible’ and the company’s claim for breach of confidentiality failed. In the Court’s view, the ‘bible’ was not sufficiently confidential since all of the information could be obtained in the public domain (albeit at considerable time and effort). There was more success for the Company in the other claims since the Court’s view was that the use of the data by Rider was illegitimate and in breach of the duties of fidelity. Since Rider was a senior employee, the Court also ruled that he owed the same fiduciary duty as if he were a Director.
Our view
This was a messy and expensive dispute for both parties and neither emerged with any credit. Although Crowson won their ruling they did not prevent serious damage to their business and the right contractual terms in the first place would have made life easier for all concerned.
