Confidential Information and Employment Tribunal proceedings

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Commercial Article

04 March, 2022

When an employee leaves your employment what do you do to ensure that they have returned all your confidential information? Most employers rely on either a contract of employment setting out the obligations on an employee to return company property on exit or on asking an employee to provide a written confirmation that everything has been returned or deleted. Some employers suspect confidential information has been taken and request undertakings from employees that effectively provide a 'legal promise' that the confidential information has been returned or destroyed. Few employers go to court for an injunction to force an employee to return confidential information.

But, what if the ex-employee has been uncooperative in returning property, been illusive, says that they have returned or deleted everything, then during an Employment Tribunal claim against you they disclose a list of the documents they will be using in the Employment Tribunal, and it lists documents that contain your confidential information. What do you do?

In a recent case, Nissan v Passi, the High Court had to consider a case where the ex-employee had taken confidential information and wanted to use the documents as evidence in his Employment Tribunal claim. The ex-employee was a non-practising solicitor who had been employed by Nissan for approximately 8 years. Nissan dismissed Mr Passi for gross misconduct, stating that he failed to follow lawful instructions and procedures and had destroyed the necessary trust and confidence of the relationship. Mr Passi claimed to have made protected disclosures about events that had been reported on in the media and that Nissan had victimised him as a result. Mr Passi brought a claim for whistleblowing in the Employment Tribunal.

The ex-employee said that he had taken the documents from his employer for the purpose of taking legal advice. He also said that he had wanted to keep the documents because he did not believe that his employer would disclose the documents in the Employment Tribunal proceedings after he brought a claim for whistleblowing. The employer said that the documents contained confidential information, some of which were legally privileged.

There had been quite a saga between the employer and the ex-employee in relation to confirming whether or not all confidential information had been returned or destroyed. The employer applied to the courts for an injunction for the ex-employee to return and delete its confidential information.

The ex-employee argued that there would be an interference by the High Court with the disclosure processes in the Employment Tribunal and with the principles of equality of arms and a level playing-field in that forum if he were made to return or delete the information. The employee argued that he had to be allowed to keep copies of the documents for the Employment Tribunal claim.

The High Court held that the ex-employee could not hold on to the documents and granted the employer an interim injunction for the return and deletion of the documents. The High Court held that the ex-employee had no propriety interest in the documents, whereas the employer did. The High Court said that there was no justification for allowing the ex-employee to 'pre-empt' what might happen in the Employment Tribunal proceedings.

The Judge in the High Court pointed out that in the Employment Tribunal, the employer, as the party in possession of the documents, will be under an obligation to make full and proper disclosure of the documents, including disclosing privileged documents and asserting any claim to privilege from inspection (ie. copies being provided to the employee to review). The Judge also noted that if the ex-employee believed that the employer has failed to make disclosure or has made a wrongful claim

to privilege he could then make an application on that basis.

What is confidential information?

Confidential information has a wide scope and almost any information, regardless of the format, can be defined and protected as confidential information under common law, on the basis that it satisfies a three-stage test:

  1. There must be a quality of confidence to the information - i.e. the information must be actually confidential and not just named as being as confidential by the holder for convenience for example. The information should not already be publicly available or accessible.
  2. The information is provided in confidential circumstances. This test would include whether the receiver of the confidential information knew or ought to have known that the information was confidential.
  3. Unauthorised use or disclosure of the confidential information without permission would cause detriment to owner.

How could I protect confidential information?

Employers and businesses would be well advised to consider categorise and clearly define what they class as "confidential information" within employment contracts, service contracts and workplace policies or even bespoke confidentiality agreements; applying to both employed and self-employed members of staff. This will make it far clearer and obvious to individuals where the boundaries lie with respect to retention of confidential documents.

Contractual provisions can go further and regulate the use of such information by staff and what must happen to it at the termination of their employment or contract.

Confidential information should not be shared widely or be easily accessible. Access should be restricted as appropriate in an effort to protect the information from being disclosed or made available to unauthorised recipients and weakening the nature of its categorisation.

Other practical steps to protect confidential information include the following:

  • Maintaining security (such as firewalls or email encryption);
  • Keep clear and concise records of what information has been accessed;
  • Provide regular training and guidance to staff; and
  • Maintaining a disaster recover protocol and robust internal procedures if confidential information is lost or unlawfully disclosed.

The protection of confidential information is critical to many businesses and the thought of it being stolen and then used against an employer is extremely worrying to employers. This case provides reassurance that an employer can take steps to ensure that ex-employees cannot simply take the information and be allowed to use it. They can be stopped from doing so and in taking such steps employers give themselves time to properly assess the information and to consider carefully how it can be prevented from being used in legal proceedings.

For more information contact Stephen McArdle in our Employment & HR department via email or phone on 0333 207 1142. Alternatively send any question through to Forbes Solicitors via our online Contact Form.

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