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Departing employees, customer lists and business intentions

In Churchill Retirement Living Limited v Luard and Others 2012 EWHC 1479 a departing employee decided to access certain documents before leaving his employer and to take copies of the same with him on a memory stick. Those documents included an Outlook contact list and information about the employer’s sites. The former employee had also told his new employer about certain business plans of his old employer. It is a scenario which is all-too-familiar to practitioners in the area. The outcome of this particular application for interim relief is noteworthy because of how the Court carefully limited the relief that it was wiling to grant.

Firstly, Roger Wyand QC sitting as a Deputy High Court Judge granted an application made on behalf of the employer by Gavin Mansfield of Littleton restraining the former employee’s use of the list. He accepted that there was an arguable case that the former employee was in breach of contract and/or confidence in copying the various documents and taking them away.

Interestingly however, he declined to make an Order preventing the former employee from contacting anyone on the list, limiting the injunction in such regard to an Order that no further use was to be made of the list itself.

The second point of interest comes in the way the Court dealt with the fact that the former employee had told his new employer (a competitor of the old employer in that both are providers of private retirement accommodation) about two sites that the old employer was interested in which were not publicly known to be on the market. The judge refused to restrain the new employer from pursuing those two sites for itself, limiting the relief granted in respect of the same to the use of any information relating to the old employer’s profit margin on any particular site.

It is important to appreciate that the refusal of the judge to grant the injunctive relief that was sought in respect of the two sites whilst no doubt at first blush viewed as being a welcome outcome by the new employer came with a sizeable sting in the tail. The judge accepted that the former employee’s disclosure of the old employer’s interest in those sites was an arguable breach of confidence. He declined to grant the relief sought because he was satisfied that any loss suffered by the old employer as to the same would be purely financial and reasonably straightforward to calculate. Accordingly if the old employer could establish loss arising from breach of confidence at trial then the defendants would have to compensate it for the same.

Nevertheless practitioners need to heed the following lessons from this case:


  1. Judges may prove reluctant to grant wider injunctions restraining defendants from using a claimant’s confidential information in the absence of a definition of confidential information;
  2. That “Eureka” moment in which one is able to establish that a departing employee has taken customer lists with him/her needs to be tempered by the realisation that the Court may limit relief to non-use of the list and not to preventing any contact between that person/ the new employer and anyone appearing on that list.

Related link:  Profile of Chris Quinn


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