Head of Employment at EC3 Legal Marina Garston gives an overview the recent decision allowing a former employer to inspect electronic devices belonging to a former employee and their new employer and also to destroy any of their confidential information found as a result of this search.
Hot on the heels of our article on restrictive covenants is the recent decision in the case of Arthur J. Gallagher Services (UK) Ltd and ors -v- Skriptchencko and others 2016.
In this case, the High Court made an order allowing a former employer (AJG) to inspect electronic devices belonging to a former employee and their new employer and also to destroy any of their confidential information found as a result of this search.
Facts of the case
Mr Skriptchencko left AJG and started employment with another insurance broker who was a direct competitor of AJG. On discovering that Mr Skriptchencko had, in breach of his contractual obligations to AJG, taken a client list which he was using to seek and do business with AJG’s clients on behalf of his new employer, AJG brought a claim against Mr Skriptchencko and his new employer for misuse of confidential information. AJG sought an order allowing AJG to search their electronic devices and to destroy any of AJG’s confidential material found on these devices so that it would no longer be used. The Court granted the order sought but subject to certain safeguards as set out below.
The Court felt justified in granting the order because it was assured that AJG would be able to establish that their confidential material had been removed and utilised by Mr Skriptchencko and his new employer. Moreover, Mr Skriptchencko admitted it and also that his new employer had approached over 300 of AJG’s clients. Also, it was clear to the Court that Mr Skriptchencko and his new employer could not be trusted to seek and delete the relevant information themselves.
As part of the order, the Court introduced certain safeguards, namely the use of an external expert appointed by the defendants to search the devices, the parties were to agree the search terms, and the information which fell within the order would be retained until after the trial just in case it had been wrongly removed.
Data restrictive covenants
Employers should ensure that they have robust and up to date restrictive covenants and confidentiality obligations in their employment contracts. If an employer suspects that confidential information is being used by a departing employee, like AJG it is important to act quickly before further damage is done.