IMPORTANCE OF CONFIDENTIALITY

Rremier Model Management v. Bruce [2012] EWHC 3509(QB)

In our last article "Using a haute couture approach to protecting business secrets," we explored methods that companies use to protect their confidential information. the issue has recently come to a head in the case of Premier Model Management Ltd v Bruce [2012] EWHC 3509(QB).

In this case, Mr Bruce was a senior model booker for Premier. During the course of his employment, he was prevented from competing with Premier and from poaching staff and models. He was also subject to 12-month non-poaching covenants post-termination. Lastly, Mr Bruce was bound by the common law duty of confidentiality which applies to all employees both during employment and indefinitely post-termination.

After handing in his notice, Mr Bruce took sick leave for the majority of his notice period. In that time, he set up a rival agency with his partner and began sending confidential information to his personal email address, including details of models, work opportunities and terms of business. As a result, Premier summarily dismissed Mr Bruce and sued him in the High Court for breach of contract. They also sued his partner and their new company for inducing the breaches.

The High Court held that by sending confidential business information to his partner, Mr Bruce was clearly in breach of his duty of confidentiality. They also held that he was in breach of his obligation not to compete with Premier during employment, as his rival agency was incorporated some six months before his employment ended. The court held that Mr Bruce's partner and company were both liable in tort for inducing these breaches.

This case demonstrates a robust approach and a willingness by the courts to safeguard these critical business issues. However, on a practical point, Premier was lucky that Mr Bruce had been careless, as it had a wealth of evidence to support its claim. The penalties imposed by the court on this occasion are draconian, so in the absence of significant evidence, judges tend to be cautious about finding that an employee has engaged in unlawful behaviour. Generally, employees who choose this path tend to be more careful and covert about their activities. as such, finding evidence to support a claim for breach of covenants is notoriously difficult and can be expensive if forensic IT experts have to be brought in.

Premier's claim was also bolstered by the fact that Mr Bruce had been competing while still employed by Premier. As such, his obligations towards his employer were beyond dispute. The court did find that the 12-month non-poach covenants were valid and enforceable in this case (because that duration reflects the usual length of contracts in the industry), however covenants must always be carefully tailored for each business to ensure enforceability. Undoubtedly, competitive behaviour post-termination will be harder to police and claims for breach will be more difficult.

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