As Shepherd and Wedderburn looks to the law of confidential information in their new webinar series, the High Court case of Decorus Limited v Penfold and another is a good reminder of the importance of the law of confidential information and restrictive covenants as an avenue for businesses seeking to protect their interests.
The case involved a sales account manager who, after working for Decorus for four years, left to start up his own business. Before he had resigned, he used the password given to him by his employer to access purchase logs containing commercially sensitive information. This information included contact details, purchasing history and profit made from transactions, and, importantly, clients’ likely future business needs. The Court had no hesitation in finding that the purchase logs constituted confidential information, and considered that it was evident that Mr Penfold had accessed them in order to assist with the establishment of his own competing business.
The Court found that Mr Penfold had clearly acted in breach of his duties of confidence and fidelity to his employer by using confidential information other than in the execution of his duty on the employer’s behalf, and by using it to his employer’s detriment. In the circumstances, this was also a flagrant breach of the restrictive covenants contained within his employment contract, and the non-solicitation and non-dealing clauses were upheld.
Decorus was awarded damages of almost £30,000 as well as an injunction against Mr Penfold, and Mr Penfold had to bear the estimated £80,000 legal costs of the case.