The question which often arise on the termination of an individual’s employment relates to the individual’s ongoing duty of confidentiality to his or her former employer. A decision handed down is significant since it was the first case in which the High Court considered the impact of the EU-wide Trade Secrets Directive (the “Directive”) (which was implemented in 2018) and the interaction between the Directive and existing English common law principles.

Implied Contractual Obligations

It is well established English common law that employees owe their employer an implied contractual duty of good faith and fidelity and an implied obligation not to misuse the employer’s confidential information (the “Implied Contractual Duty”).

English common law recognises three distinct classes of information obtained by employees during the course of their employment, namely:

• Non-confidential information (1);
• Confidential information which is acquired during the course of employment which becomes part of the employee’s experience and skills (2); and
• Confidential information in the form of specific trade secrets (3).

The Court –

Reiterated the existence of the Implied Contractual Duty, but provided helpful clarity in relation to the application of the Implied Contractual Duty to these categories of confidential information. The Implied Contractual Duty restrains misuse of information during the period of employment, but that duty terminates when employment ends the Implied Contractual Duty restrains the use or disclosure of class 3 information both during and after the period of employment).

The distinction does not mean that information can always be freely used or disclosed after the end of the relevant employment – it confirmed that copying a list of the employer’s customers for use after the end of the employment, or deliberately memorising the list for such use, is liable to constitute an act in breach of confidence since that copying would have taken place during the period of employment.

Equitable Duty of Confidence

Together with the Implied Contractual Duty, there exists an equitable obligation of confidence on an employee where the individual receives information that he or she knows or ought to know is fairly and reasonably to be regarded as confidential and that this equitable duty continues to apply after the end of employment -with the exception of the information held honestly in the mind of the employee at the time of leaving their employment.

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