Warm Zones v Thurley and Buckley – confidential information and injunctions

The case of Warm Zones v Thurley and Buckley concerns a relatively common issue in business – the retention and confidentiality of data, and what steps a business can take when an (ex-)employee has breached their duty of confidentiality towards their employer.

The facts

Ms Thurley and Ms Buckley were employees of Warm Zones, a not-for-profit organisation whose aim is to eradicate fuel poverty. Although Warm Zones was a charitable organisation, it had built up a large database of clients and other proprietary and commercial information which would be valuable to any competitor in the energy markets. Ms Thurley was employed as a zone director from 8 January 2007 and Ms Buckley was employed as an IT and project manager from November 2009. Both employees were employed on identical business terms (their contracts included an express duty of confidentiality that they owed to their employer), both employees had access to the business’ database¬†during the course of their employment, and both employees’ contracts terminated in March 2013.

After their contracts of employment terminated, both Ms Buckley and Ms Thurley joined UK SS Renewal Energy Services Limited (“RES”). It subsequently came to light (after documents were disclosed in a claim for unfair dismissal that Ms Thurley had brought against Warm Zones after her departure) that Ms Thurley and Ms Buckley had disclosed or intended to disclose Warm Zone’s confidential information to RES. Warm Zones therefore applied for a mandatory¬†injunction and requested an order that would allow for the inspection of both Ms Buckley and Ms Thurley’s personal computers.

Mr Justice Smiler, sitting in the High Court, granted Warm Zones’ application for an injunction and stated that he would allow for Ms Thurley and Ms Buckley’s computers to be inspected and imaged by Warm Zones’ forensic team. The principal reason that Mr Justice Smiler granted the injunction and ordered the inspection was that he believed that damages would not be an adequate remedy if confidential information (which had been accrued over many years by Warm Zones) was disclosed by the two former employees. However, the Judge did make clear that he had reservations about the scope of the order that he would make, as he was concerned that third-party data and other irrelevant confidential information would be present on the personal computers of Ms Thurley and Ms Buckley.

What does this mean for me?

If you manage a business then it is important to include a clause in your employees’ (or consultants’) contracts relating to the business’ confidential information. This is an important step in protecting your business’ confidential information from disclosure, whether such disclosure is during the course of employment or after. You may also wish in appropriate circumstances to consider inserting restrictive covenants into your employees’ contracts of employment, as such covenants (if appropriate and well-drafted) will afford a large measure of protection to your business’ commercial interests if and when the employee leaves.

If you are an employee then you should check your contract of employment to see whether there is an express duty of confidentiality contained within your contract and, further, whether there are any restrictive covenants in your contract of employment which may bind you once your employment terminates. If you do have such clauses in your contract of employment then it may be advisable to obtain legal effect on the relevant terms and their effect.

Why is this case significant?

This case does not establish a new point of law. However, the granting of a mandatory injunction (a form of injunction that requires certain steps to be taken by third parties) as happened in this case is relatively rare, as compared to the granting of prohibitory injunctions (which forbid third parties from undertaking certain actions). However, this case does provide support for businesses, in that the courts are willing to recognise the commercial and proprietary value of business’ databases and to permit the business to enforce the confidentiality obligations that were included in the employees’ contracts of employment.