18 March, 2016
Most businesses will hold data. This may be lists of employees or of customers or even more important details such a pricing structures and tender quotes. But is that data adequately protected from third parties?
Many of these businesses recognise the need for well drafted employment contracts which include restrictions on the disclosure of confidential information. But what happens if it falls into the hands of a third party who is not an employee?
The High Court has allowed a multi-national company, TATA Consultancy Services Ltd a final Injunction against a non-employee to deliver-up the confidential information and prevent him from communicating or disclosing it to any third party.
In this case, the non-employee, Mr Sengar, had applied for employment with TATA, but had been rejected, and he remained aggrieved. He wished to bring a claim against TATA in the Employment Tribunal based on discrimination against him, and sought the assistance of an employee of TATA to obtain a list of TATA's employed staff, their roles, e-mail addresses, staff numbers and who they worked for - all of which is sensitive information.
The unnamed employee would have had to access the database by means of entering a unique staff number and password, enabling TATA to show that the information was protected by tight security as they expected it to be kept private and confidential. The unnamed employee had a contract of employment which defined TATA's confidential information. The employee was passing the information to Mr Sengar in breach of confidence, but what about Mr Sengar?
The Court accepted that Mr Sengar should have known that TATA expected the data to remain confidential. The fact that Mr Sengar would not name the employee meant he knew that the employee had acted in breach of their contractual duty to TATA. Mr Sengar also admitted that he knew that the information was not widely available to the public.
TATA argued that it would be catastrophic to their business if the confidential information fell into the hands of a competitor or a head-hunter, and unless they were granted an Injunction it could not be compensated for damages as it would be impossible to monitor and assess financial loss to its business over a period of time.
The Court accepted this and stated that the information amounted to trade secrets and granted a final Injunction.
Injunctions are clearly a useful remedy to protect the data and confidential information of a business, particularly where the business cannot be compensated if the information was misused. The need to act fast and instruct knowledgeable legal advisors is also key to being successful.
Manisha Modasia at Forbes Solicitors specialises in injunctive claims and can be contacted on 01254 222 324.
TATA Consultancy Services Ltd -v- Pranshant Ashok Singh Sengar