A recent High Court case (Arthur J Gallagher Services UK Ltd –v- Skriptchenko) has established that an employer seeking to protect confidential information taken by former employees setting up a competing business can obtain an injunction for the imaging and search of their personal electronic devices and the deletion of any of the employer’s confidential information found on them.
The Claimant employers (AJG) were companies within the Arthur J Gallagher group of companies who provide insurance brokerage services. In the middle of 2015 it came to the Claimants’ attention that the first Defendant, Mr Skriptchenko, and some other former employees had taken away their confidential information and were using it to contact and seek to do business with the Claimants’ clients on behalf of their new employer, Portsoken Limited (PL).
AJG sued Skriptchenko, PL and the other former employees on the basis of alleged misuse of confidential information.
In the course of the litigation, the Defendants disclosed about 4000 documents including an email from one former employee to another stating: “I don’t think you can formally put [this information] in any presentation as we would obviously be breaching confidentiality but would suggest that we keep in our back pocket to show on a nudge, nudge wink, wink basis to interested parties.”
In their defence, the former employees and the new employer, PL, made a partial admission of misuse of confidential information.
AJG applied for a Court Order “permitting the imaging and inspection of the Defendants’ computers and electronic devices and the deletion therefrom of confidential information belonging to the Claimants”. It is established that, in cases involving misuse of confidential information held in electronic format, an employer may seek an Order requiring a former employee (or his new employer) to stop using the confidential information and to destroy all electronic copies of it remaining on their computers.
In this case the Court went further and, in making an Order for the imaging, inspection and deletion of confidential information from the former employees’ and Portsoken Limited’s computers, required the Defendants to permit a forensic expert to inspect the electronic devices, search them and irretrievably delete such confidential information as was found on the Defendants’ devices.
The basis for the decision was that the Defendants had admitted limited use of the confidential information and revealed in the email described above “a high degree of subterfuge in the use of the Claimant’s confidential material”. The Judge concluded that the Defendants could not be trusted to seek out and delete such material themselves, as Defendants would normally be required to do in cases such as this.
In an age in which confidential information is routinely held and communicated in electronic format, the power of the Court to make an Order of this sort is a useful addition to the armoury of potential Court Order’s available to employers.