Bad leavers who take client information with them

One of the most aggravating and potentially costly things that an ex employee can do is take your client data base with them when they leave.  This is usually done with a view to the ex employee using the information when they set up in competition or join a competitor.  Employers are often keen to pursue these employees through the courts for breaches of the post termination aspects of their contract of employment.  However, due to the high cost, and uncertainty of pursuing an injunction in the civil courts, employers can often be left feeling frustrated at having to abandon an otherwise meritorious action against an ex employee.

In this set of circumstances one ex employer has taken a different tack in order to preserve their clients’ confidentiality.  The Information Commissioner’s Office (“ICO”) took up the case against the ex employee of a waste management company in Shropshire, who had emailed the details of 957 clients to his personal email address as he was leaving to start a new role at a rival company. The documents contained personal information including the contact details of customers, as well as purchase history and commercially sensitive information.

The ex employee was prosecuted at Telford Magistrates’ Court for the criminal offence of unlawfully obtaining data. He pleaded guilty to the offence under section 55 of the Data Protection Act, and was fined £300, ordered to pay £405.98 costs and a £30 victim surcharge.  However, potentially the most damaging impact for the ex employee is the fact that he now has a criminal record.

The ICO has a range of tools available to it in order to make sure that organisations and individuals comply with the Data Protection Act. In this case the ICO prosecuted an individual, but they can also issue “stop now” notices to prevent the unlawful use of data, and issue monetary penalties directly to organisations.

While it would not be appropriate to try and involve a public authority in a trivial or purely commercial dispute over the way in which an employer and employee part company; a leaver’s decision to take information with them, without any lawful basis for doing so, may have wider implications for the data subjects. In these circumstances raising the matter with the ICO may be an appropriate course of action instead of, or in conjunction with, a civil court action.

Client and contact information can be a very important and integral part of a business’ success.  There are a number of steps businesses can take to protect their client contacts and databases. Our employment team can offer bespoke advice on getting effective restrictive covenants for your key employees; in addition we can help when the time comes to enforce them.  Our IP/IT team is also able to advise and help with any data protection issues.

To discuss this or any other HR issue call 01392 210700 or