In a case that brought the issues of discovery, data protection and employment law together, a former employee accused of breaching the terms of his contract with his former employer, by “assisting recruitment” and supplying confidential information to the company he moved to, was recently ordered by the High Court of Ireland (the “Court”), to make discovery of all documents “reasonably available to him”, including those documents that might be acquired through the means of a data subject access request, under European Data Protection provisions, in other jurisdictions.
The defendant, Mr. Daniel Needham, a trader in financial instruments, was employed by the plaintiff, Susquehanna International Group Limited (“SIG”), for just under ten years, initially as an assistant trader, later being promoted to the role of trader. Mr. Needham was paid a substantial salary and bonus payments in respect of his employment. Mr. Needham left SIG for a rival firm, Citadel LLC (“Citadel”), with the assistance of a recruitment agency, Execuzen Ltd (“Execuzen”).
SIG sought injunctive relief and damages for breach of the employment contract on the grounds that: confidential documents obtained in the course of his employment with SIG regarding the business, employees and business relationships of the company, were utilised for the benefit of Citadel; and that Mr. Needham breached the express terms of his contract of employment by seeking to hire or solicit for employment, existing employees of SIG, to Citadel.
The primary action of SIG was that Mr. Needham has breached the terms of his contract of employment, inter alia, by assisting Citadel with the recruitment of other SIG employees and supplying Citadel with confidential information concerning the business of SIG, including the identity and details of other traders employed by SIG, the types of trades carried on by them, the profits earned by them and details of confidential trading strategies and models used by SIG or in the course of being developed.
Citadel operates a business of investment trade in broadly the same field as SIG and was at the material time intending to set up business in Dublin. It is pleaded that the intention of Citadel and its objective was to acquire a readymade business by persuading a group of employees of SIG who would have knowledge and expertise in financial trading to leave SIG and bring with them their knowledge and confidential information, including the know-how and trading strategies of SIG.
Discovery of three categories of documents was sought, and Mr. Needham did not refuse to make discovery, but, rather has sought to limit the categories to those readily available, falling short of a data request.
Whether discovery should be ordered in respect of a category of documents is well-established in law. In short, documents are to be discovered if they are relevant for the determination of the issues between the parties.
The Court was asked to grant a request for discovery relating to a category of documents which might have been generated in the course of the recruitment process, or for the purposes of the employment by Citadel, by itself or through an agent, of the former employees of SIG, including Mr. Needham. The primary dispute between the parties was that this category constituted a request requiring Mr. Needham to make discovery of documents which could be available to him on foot of a data subject access request.
Mr. Needham argued that the inclusion of a request for documentation relating to his engagement with Execuzen Limited was not discoverable, and that the firm was not named in the statement of claim by SIG. Mr. Needham’s counsel argued that SIG was attempting to bypass the judicial process by seeking an order the direct effect of which would require Mr. Needham to avail of his data protection rights, and that the correct approach was for SIG to seek non-party discovery against the relevant persons.
The Court held that the fact that Execuzen was not named in the statement of claim did not make any engagement between Mr. Needham and that firm irrelevant to the claim, as Execuzen was acknowledged to have acted as a recruiting agent for Citadel. SIG argued that the category of documents referred to was within the “power” of Mr. Needham to discover, as explained by the Supreme Court in Thema International Fund plc v. HSBC International Trust Services (Ireland) Ltd. The Supreme Court held that a document was capable of being the subject matter of an order for discovery if the document, while not in the possession of a person, was one in regard to which he or she had the legal entitlement to procure or obtain.
The relevant documents were considered to be more likely than not held in the offices in England of Citadel and/or Execuzen. No evidence of foreign law was produced at the hearing, but it is common case that the right to seek and inspect personal data is a right which derives from the Data Protection Directive (EU Directive 95/46/EC). There was no dispute between the parties as to the purpose of the Directive, being to provide a person with the right of access to data relating to him or her, and such a right is recognised as deriving from fundamental rights, including the right of privacy. It was agreed by both parties that, under the law of England and Wales, a person has a right of access under the Data Protection Act 1998 and a direct right of access to the Court to enforce that right.
The Court held that the request in the present case was not oppressive or disproportionate. From the evidence and arguments before it, the Court was satisfied that Mr. Needham had a unique right and requirement to seek certain classes of documents.
While the request was couched in the language of contemporary data rights, the class of documents sought to be discovered was a type of document which was known and recognised in the common law. A person may be compelled to make discovery of documents which are in the possession of an agent of that person, for example a solicitor, a banker or a trustee, to take a few examples. While the Court accept that counsel for Mr. Needham was correct regarding the purpose of the Data Protection Directive, and while SIG could seek in the alternative to make an application for non-party discovery against Citadel or Execuzen, the test remains, one which is long established in the authorities, namely, whether the documents are relevant and necessary and the request is proportionate and not unduly oppressive.