High Court makes an unprecedented order for the destruction of confidential information

The High Court has made an unprecedented order for the inspection and imaging of electronic devices and computers belonging to an ex-employee and his new employer, and the destruction of any confidential information belonging to his previous employer found on these devices.

In the recent case of Arthur J. Gallagher Services (UK) Limited and others v Skriptchencko and others [2016] a number of companies within the Arthur J Gallagher group sought an injunction against an ex-employee and his new employer, Portsoken Ltd, regarding their confidential information. Both companies are in the business of providing insurance brokerage services.

Gallagher became aware that an ex-employee had taken confidential information after leaving the company and was using it to contact and seek to do business with Gallagher's clients in his new role at Portsoken. In particular, he was pitching Portsoken's pricings in a way that would undercut Gallagher's rates. He had also taken a client list from Gallagher, which Portsoken then used to approach over 300 of Gallagher's clients. Gallagher contended that an order for inspection and imaging the information was necessary to prevent further access, and an order for deletion of such material was necessary to prevent further use. Portsoken maintained that the search of devices and destruction of material was "invasive, unprecedented and unnecessary".

The Court decided that the order for inspection, imaging and deletion was required to protect Gallagher's confidential information. To provide some assurance to Portsoken, it was ordered that a copy of the deleted material would be saved so that it could be restored if later found to be wrongly removed. This order was granted despite there being no previous authority for ordering the destruction or deletion of confidential information.

This decision provides some comfort to employers regarding the protection of their confidential information post-employment. The usual position is that after an employment has ended, the duty to protect an ex-employer's confidentiality only extends to trade secrets. Confidential information that does not constitute a 'trade secret' can only be protected if there is an express term in an employment contract to that effect. There is no definitive list of what constitutes a 'trade secret' and it is usually determined on a case-by-case basis.

However, whilst this is a positive decision for employers, it is still advisable to include express terms in an employment contract specifying what information should be kept confidential and deleted after the employment has ended.