Employee copied confidential company files after resigning

A company has been granted a court order preventing a former employee from disclosing or using its confidential information, Mark Aspin Director & Head of Dispute Resolution reports.

The company, Rentrack Ltd, collected ticket sales data for cinemas. One of its employees, Mr Green, was approached by a competitor and offered a job in June 2020.

Before resigning, he bought a pay-as-you-go SIM card for a mobile phone and requested a global company report. He made copies of the files into a dropbox account, connected a USB drive to his work laptop and copied its entire contents. He then installed software to wipe the data from his phone and restore it to its factory setting.

Following a request by Rentrack, he did not deliver up the mobile phone or all emails.

The company contended that Green’s behaviour was suspicious, and it needed a court order to protect its confidential information from a competitor.

Green submitted that he had copied the files to help a colleague and that it was his normal practice to apply software to wipe his device. He further argued that he was willing to promise not to disclose or use any confidential information.

The two sides had agreed on the terms of a regime to cover the matters but differed on whether it should be a contractual regime or whether a penal notice should be attached.

The High Court ruled in favour of Rentrack. It held that there were several matters which entitled the company to be suspicious. It was clear that damages would be inadequate if Green were to disclose or make use of confidential information and if, contrary to his assertion, he did not hand over the devices.

By contrast damages would be adequate to compensate him if an order was made.

Green had promised in his employment contract not to disclose or use any confidential information and there was a serious issue to be tried as to whether he had acted in breach of that contract. It was appropriate to make an order prohibiting Green from disclosing or using Rentrack’s confidential information and requiring him to make a statement about any past use or disclosure.

If you would like more information about protecting your business or any aspect of employment law please contact Mark on 01228 585723.