The High Court’s decision in Pennwell Publishing (UK) Limited v Isles and others has highlighted the issue of whether an employer or an employee can claim ownership of a list of contacts created and maintained by the employee both prior to and during his employment.
The employee in question, X, had resigned from his employment at Pennwell Publishing in order to set up a competing business. Prior to commencing his employment at Pennwell, X had started compiling a database containing contacts acquired during his previous employment as a journalist (of both a personal and professional nature).
Before leaving his employment, X removed the contact database from his work computer. Pennwell brought proceedings against him claiming that it owned the contact database as it had been prepared and maintained on computers belonging to Pennwell and had been compiled for the purposes of his employment.
The High Court held that X had breached an express term of his employment contract which prohibited outside interests during employment and had breached an implied duty of good faith and fidelity to his employer.
The court also held in favour of Pennwell in finding that the database of contacts was owned by Pennwell as it formed part of Pennwell’s Outlook system. X was not entitled to copy or remove the database once his employment had ended. Pennwell succeeded in obtaining an injunction to prevent him from using the database (other than individual items contained on the database which would have been known to him through separate means).
Employers should be aware that, where a database of contacts is stored on its email system and is backed up by the employer, ownership of that database will rest with the employer. The issue of ownership of material should be drawn to employees’ attention through the use of email policies.