Ex-workers set up in competition

Feb 19 2008 by Karen Dent, The Journal

A RECENT case has high- lighted the problems faced by employers trying to impose an obligation of confidence on ex-employees.

The case concerned a dispute between textiles company Crowson Fabrics and former employees Mr Rider and Mr Simpson. Before leaving Crowson, the defendants made copies of customer and supplier contact details and information relating to profit margins. More than 70 customer email addresses were transferred to a Hotmail account. On leaving Crowson, the defendants set up a competing business.

Crowson claimed that the pair had broken an implied duty not to remove confidential business information from it and in doing so they had infringed the company’s database right.

To bring an action for breach of confidence, the information must:

Have the necessary quality of confidence.

Have been imparted in circumstances importing an obligation of confidence.

Have been subject to unauthorised use to the detriment of the party to whom the information belonged.

The court ruled that the informat- ion taken was not confidential, as details such as names and addresses were in the public domain.

The judge said: “If the information is in the public domain, it is capable of being used, even if it is derived from the claimant’s documents … all of the information alleged to be confidential was in the public domain or was easily discoverable by the defendants.”

Other information counted as part of the skills and expertise that the defendants would have acquired over time in their roles at Crowson.

Database right – Crowson also made claims under the Copyright and Rights in Databases Regulations, which implemented the European Database Directive. The Database Directive was created in order to encourage and guard investment in databases that did not qualify for protection under copyright.

There was clear evidence that the defendants had infringed Crowson’s database rights by copying information from its computer systems.