Breach of Confidence and Fidelity under the Employment Contract: A Case Study
07.07.2023
In a recent case heard at the High Court, Sterling Law successfully represented a client against a former employee who had started his own business after leaving the company. The former employee had allegedly contacted the client’s existing clients and offered them services “as provided last year.” He/she had also attempted to pass off his own services as if they were being provided by the client.
The client’s lawyers argued that he/she had breached the implied term of fidelity in his employment contract, as well as the confidentiality clause. They also argued that his/her actions had violated the Data Protection Act 1998 (DPA 1998).
The High Court found in favor of the client and granted an injunction preventing Mr. Smith from contacting the client’s clients or using the client’s confidential information. The court also ordered our client to delete any copies of the client’s database.
This case highlights the importance of having a well-drafted employment contract that includes clear terms on confidentiality and fidelity. It also shows that the courts will take action to protect businesses from former employees who breach these terms.
Key takeaways to consider:
- The implied term of fidelity requires an employee to act in the best interests of their employer, even after the employment relationship has ended.
- The confidentiality clause typically prohibits an employee from disclosing confidential information about their employer, even after they have left the company.
- The DPA 1998 protects individuals’ personal data, and businesses must take steps to ensure that this data is not disclosed without the individual’s consent.
By taking the time to draft a comprehensive employment contract and by ensuring that employees are aware of their obligations under the contract, businesses can help to protect themselves from former employees who may try to take advantage of them.
This case is a reminder of the importance of having a well-drafted employment contract that includes clear terms on confidentiality and fidelity. By taking the time to draft a comprehensive contract, businesses can help to protect themselves from former employees who may try to take advantage of them.
If you have any questions about employment contracts or confidentiality, please contact Sterling Law. We would be happy to help you understand your rights and options.
Additional Information
- The High Court’s decision in this case is a significant victory for businesses and a warning to former employees who may be considering breaching their employment contracts.
- The case also highlights the importance of businesses having a comprehensive data protection policy in place. By taking steps to protect their employees’ personal data, businesses can help to avoid costly legal action.
If you are a business owner or a former employee who has been involved in a similar situation, please contact Sterling Law for a consultation. We would be happy to help you understand your rights and options.
