#7944 - Duty Not To Disclose Confidential Information - Labour Law

19th April

Tuesday, 19 April 2011

12:01 p.m.

Duty not to disclose confidential information

Chicken case

• Two types of confidential information - stuff that's protectable during course of employment, and stuff that's protectable both during and after the period of employment.

• Duty of fidelity covers disclosure of any information damaging to the employer even if it is not "confidential information" in the strict sense.

• Duty not to disclose confidential information in the strict sense survives termination of the contract.

New Zealand Needle Manufacture

• Shower head holder (exciting stuff!)

• Manufacturing processes of a secret nature; customer/client lists/details of market research; accounts; details of tenders; budgeting forecasts; pricing strategies; advertising campaigns = confidential information.

• Things in the public domain = things that are in the public domain or likely to go into the public domain.

• An example of information that can't be disclosed during employment, but can be disclosed after employment = your boss teaches you how to water down drinks correctly at the bar you work at.

• Example of information that can't be disclosed ever = a drink that has been developed that has secret ingredients.

Confidential information:

• "Confidential information" (in the strict sense of proprietary interest) = protected by contract and equity both during and post employment.

• Other sensitive information (trust, confidence, good faith, loyalty) = protected by contract only during employment.

Coco

• (See outline for the three criteria that must be satisfied).

Lots of cases dealing with whether confidential information was misused.

English court of appeal:

• Nature of employment

• Whether employees habitually handled confidential information (Did they recognise info confidential)

• Nature of information (highly confidential? More in the public domain?)

• Just labelling info confidential isn't sufficient - but could contribute to evidence.

Peninsula:

• Element of malice taken into account - deliberate copying of employer's information by employees implies as a matter of evidence that the material has the necessary quality of confidence about it.

HNR Block:

• An express restraint of trade clause that covered good will.

• The duty not to misuse confidential information was applied to S's adaptation of HNR Block's book-keeping and tax preparation forms.

• HNR Block spent time and effort developing the forms. So got nominal damages for the breach of duty of fidelity.

Relation between implied term and cognisance of restraint of trade clause.

• If you have a restraint of trade clause protecting confidential information, it's easier to stop and employee who's going out to work in breach of that clause. However, if no clause, you wait for an actual breach.

Remedies

• Anton Piller order (interlocutory and ex parte): "search order".

  • Plaintiff can enter and search property of defendant, and take away any materials that are needed to run the case.

  • Note can't just break in. But does empower you to enter and search for relevant evidence.

  • If defendant refuses entry = contempt of court.

• Injunction

  • Interim and permanent.

• Compliance order (breach of employment contract only)

• Damages

• Public interest defence called the inequity rule - someone can be justified in disclosing sensitive information if there's some illegality involved.

  • e.g. if the confidential information relates to health and safety, pollution, corruption, tax evasion.

  • One of the major cases dealt with price-fixing arrangement between laundry services in UK.

  • Woodward v Hutchins

    • Dealt with breach of express term not to disclose information, but could have been implied term as well.

    • H a PR officer for a company formed by pop stars.

    • H signed a clause promising to preserve confidentiality both during and after employment. Interviewed by a newspaper and told truth about pop stars (drinking and sex).

    • Injunction applied for. Lord Denning said that there was a public interest in knowing the truth about the 'nefarious dealings' of the stars.

    • Invocation of the inequity rule (although probably not actually the correct decision.)

  • Lion Laboratories v Evans

    • Breathalysers.

    • Tests showed not very accurate. Evans told newspapers.

    • Inequity rule invoked - even though E gave away confidential information, the public had a right...