Chapter 16Employing labourIt is worth noting that the above principles may not
be applied where there is an express restraint of trade
in the contract. In SBJ Stevenson Ltdv Mandy(1999)
the High Court stated that whether information is con-
fidential should be assessed by its nature and not by the
way in which it has been acquired. It was unacceptable,
said the court, that an employee who has entered into a
restrictive covenant as to confidentiality and soliciting of
customers should be allowed to use information learned
as part of doing the job even if at the time he acquired it
he had no intention to misuse it.
The High Court’s approach appears to be right. If not,
nearly all express confidentiality restraints would be
unenforceable. The High Court in Mandy was dealing
with the insurance broking industry, which is highly
competitive.
Before leaving the topic of confidentiality, three further
points should be noted.
1 Setting up a competing business.If an employee leaves
without giving the employer proper notice in order to
set up a competing business or work for a competitor,
the employer may be able to get an injunction to prevent
the employee from acting in this way. The action is most
useful where the employee has a contract requiring a
long period of notice. Suppose that a senior manager in
a business is employed under a contract which requires
12 months’ notice and that the manager deals with the
affairs of two important clients or customers. He or she
resigns giving only one month’s notice in order to set up
in business and take the work of the two major clients or
customers. There are no post-employment restraints of
trade in the contract. In these circumstances it may be
possible for the employer to get an injunction to prevent
the setting up of the new business for 12 months. This
principle was established in Evening Standard Co Ltdv
Henderson(1987), though it is, of course, a relevant
consideration in the employer’s favour if he is prepared
to pay the employee during the notice period even
though he does not return to work.
The principle is sometimes referred to as ‘garden
leave’ since the employee cannot go back to work and
cannot work for another employer so he may prefer to
tend his garden to pass the time!
It is necessary now to consider the ‘garden leave’ cases
in the light of the Court of Appeal decision in William
Hill Organisationv Tucker(1998) where the ruling was
that if the court considered that the employee should be
allowed to work out his notice even though he was not
in the traditional categories, e.g. commission workers, then
an injunction would not be granted unless there was an
express term in the contract allowing the employer to pay
but specifically to refuse to allow the employee to work.
2 Confidentiality in reverse.It is also of interest to
note that while it is normal for employers to bring claims
against employees to prevent them from using confiden-
tial information obtained in the employment, confiden-
tiality works both ways. Thus, in DalgleishvLothian and
Borders Police Board(1991) the Lothian Council asked
the Board for details of the names and addresses of its
employees so that the Council could identify commun-
ity charge defaulters. The court granted the employees
an injunction to prevent this. The information was con-
fidential between employer and employee. As more and
more people become concerned about data protection,
this case shines a welcome light on the employee’s right
of privacy and the employer’s duty not to infringe it by
wrongful disclosure.
3 Whistleblowing.When discussing an employee’s duty
of confidentiality, mention should be made of the pro-
visions of the Public Interest Disclosure Act 1998. The
Act protects workers from being dismissed or penal-
ised for disclosing information about the organisation in491plant was working and James did see a number of pro-
cesses. It also appeared that Holloway had, during his
employment, made copies of certain of the claimants’
documentary material and had taken these copies away
with him when he left their employment. The claimants
wanted an injunction to prevent the use or disclosure of
the material contained in the copies of documents made
by Holloway.
The court held that the claimants were entitled to an
injunction against Holloway so far as the documentary
material was concerned, although there was no express
term in his contract regarding non-disclosure of secrets.
However, the court would not grant an injunction res-
training Holloway from putting at the disposal of Vita-tex
Ltd his memory of particular features of the claimants’
plant and processes. He was under no express contract
not to do so and the court would not extend its jurisdic-
tion to restrain breaches of confidence in this instance.
Holloway’s knowledge of the claimants’ trade secrets
was not readily separable from his general knowledge of
flock printing.
An injunction was granted restraining Vita-tex Ltd from
making use of the information acquired by Mr James on
his visit.