[ad_1]
The current Court docket of First Occasion resolution in Tahoe Life Insurance coverage Firm Ltd v Cheung Wai Yi [2024] HKCFI 782 serves as a reminder that employers ought to take proactive steps to safeguard their confidential info when coping with departing workers.
Background
Tahoe Life Insurance coverage Firm Restricted (Employer) is an insurance coverage firm which provides a variety of insurance coverage merchandise in Hong Kong. Ms Cheung (Worker) was employed as an Govt Assistant. Clause 13 of her employment contract (Use of Data Clause) supplied that:
“13. Use of Data
Responsibility of confidentiality of all employees to the [Employer] and its brokers or prospects is ruled by the Private Knowledge (Privateness) Ordinance in addition to the frequent regulation. With out limiting your responsibility underneath the regulation, and as well as thereto, it’s essential to not, throughout and/or after termination of your employment with the [Employer], immediately or not directly disclose, disclose, or talk to any particular person, agency or company in any method and for any goal by any means, together with, with out limitation, for monetary acquire in any method (besides vital for the correct efficiency of your duties underneath this employment or with the written consent of the [Employer]) any info of any sort, nature, or description regarding any matter affecting or regarding the enterprise of the [Employer], or any matter affecting or regarding its brokers or prospects, together with with out limitation to:-
(i) any commerce secrets and techniques or any correspondence, accounts, connections or dealings of the [Employer] or any information gained in relation thereto throughout your employment; and
(ii) any info by any means regarding any previous or current brokers or prospects of the [Employer]“.
The Worker’s employment was terminated six months after she began working for the Employer. The Worker commenced a declare within the Labour Tribunal however subsequently withdrew that motion.
5 days after withdrawing the motion, the Worker despatched two emails to the CEO of the Employer copying numerous events together with the Labour Tribunal, the Employer’s HR division and different officers of the Employer. Within the emails, the Worker requested that the Employer reimburse her for the alleged deterioration triggered to her bodily and psychological well being because of her employment with the Employer. To display the extent of labor that she was in a position to accomplish previous to her deteriorated well being, the Worker hooked up minutes and PowerPoints of the Employer’s administration assembly and government committee assembly ready by her throughout her employment.
Alarmed by the Worker’s possession and disclosure of the confidential materials, the Employer carried out a search of the log of the Worker’s work e mail and found that in her employment, the Worker had despatched greater than 20 emails from her work e mail to her private e mail accounts. In whole, the Worker had hooked up 40 inside paperwork which contained confidential info of the Employer, together with board monitoring reviews, funds reviews, expense, particulars of auditors and financial institution accounts.
The Employer commenced an motion towards the Worker for breach of her responsibility of confidentiality, in search of interim injunctive aid towards the Worker from divulging any of the 40 paperwork hooked up in her emails. The Court docket present in favour of the Employer and granted the interim injunctive aid.
Responsibility of confidentiality
The Worker’s responsibility of confidentiality was expressly supplied for in her employment contract and implied underneath the rules defined in Faccenda Hen Ltd v Fowler and others [1987] 1 Ch 117 (Faccenda). Specifically, the Use of Data Clause expressly supplied that the Worker owed an obligation to the Employer, its brokers and buyer to not, throughout and/or after termination of the Worker’s employment with the Employer, disclose any info together with commerce secrets and techniques, correspondence, accounts, info gained throughout employment, and data of the purchasers and brokers of the Employer.
Interim injunction
Making use of American Cyanamid Co. v Ethicon Ltd [1975] AC 396, the Court docket discovered that the steadiness of comfort favoured the Employer in granting an interim injunction prohibiting the Worker from additional disclosure of the paperwork. In coming to this conclusion, the Court docket’s findings had been as follows:
- there was at the very least a severe difficulty to be tried relating to the disclosure of the 40 paperwork and the data they contained. This disclosure was both expressly prohibited by the Use of Data Clause within the Worker’s employment contract, or by the implied phrases underneath the rules elaborated in Faccenda as a result of they contained commerce secrets and techniques;
- given the character of the paperwork and the data they contained, their disclosure would end in irreparable injury to the Employer;
- a danger of additional disclosure might be inferred from how the Worker dealt with the paperwork; and
- the Employer was in a position to pay damages triggered to the Worker for purpose of this interim injunction if its declare finally failed.
Key takeaways
The case serves as a well timed reminder that employers ought to take proactive steps to safeguard their confidential info when coping with departing workers. Unauthorised switch of confidential info could go undetected through the course of employment and even after termination. Employers also needs to preserve data of the entry with a view to monitor the circulate of confidential info, which can be helpful in restraining unauthorised disclosure of confidential info by authorized motion.
The case additionally emphasises the significance of fastidiously drafted confidentiality obligations. Though workers usually owe an implied responsibility of confidentiality to their employers even after the termination of their employment, the safety afforded by such responsibility solely applies to commerce secrets and techniques and never all confidential info. Employers ought to often evaluation their confidentiality provisions to make sure that they proceed to supply the perfect safety.
Key Contacts
[ad_2]
