Memorised confidential information

Posted: 29th June 2017

ConfidentialDeparted employees often retain confidential information in their heads that would be of use to a competitor and such memories can be protected in just the same way as hard documents or data.

The High Court strikingly made that point in holding a senior executive to the garden leave provisions of his contract.

Following his resignation, the chief executive officer of an e-commerce company was, in accordance with his contract, placed on garden leave for 12 months.

Three days after his departure, however, one of the company’s competitors publicly announced that it had taken him on in a senior role.

The company launched proceedings and an interim injunction was granted which forbade the man from working for the competitor in any capacity during his garden leave. The order also prevented him from having any contact with the company’s clients or employees and from making any use of its confidential information.

In continuing the injunction, the Court noted that he was an intelligent and skilled individual who had enjoyed unhindered access to a wide range of the company’s highly sensitive and strategic information, at least some of which he was likely to have retained in his memory. Such information would be of great interest to competitors and its disclosure would cause the company significant harm.

Garden leave provisions were commonly employed in the industry and the Court found that the company had a legitimate business interest in protecting the information that he carried around in his head. The man would continue to receive his salary whilst on garden leave and was unlikely to be put out of pocket if the injunction remained in force until the expiry of his 12-month notice period.