An employer has been successful in restraining a former employee
and her new employer from using the old employer's contact list
in the recent decision of Prime Creative Media Pty Ltd v
Vranjkovic  FCA 1030.
The restraint granted by Justice Ryan of the Federal Court of
Australia is on an interim basis, until the matter is finally
determined. The decision indicates that the courts are willing to
assist with the protection of a business' confidential
information from unauthorised use by former employees.
The employer is a publisher and provides marketing services to
the commercial road transport industry. The employer has built up
and maintains a database containing names, addresses, telephone
numbers and email addresses of contacts, including advertising
customers, subscription customers and marketing services customers.
The database contains more than 1000 names and contact details.
The employee was initially employed by the employer as a
magazine editor, and later as a marketing and accounts manager. The
employee had access to the database during her employment and
compiled her own database of contacts during the course of her
The employee resigned in September 2008. Shortly after her
resignation, the employer's Managing Director received contact
from several of his clients on the database advising that the
employee had contacted those clients via email to say that she was
doing some consulting and public relations work on her own.
The Managing Director became concerned that the employee had
retained a copy of the database and was using it for her own
purposes. He wrote to the employee and asked her to return any CDs
or hard copies of email, email backup, editorial contacts and
general databases. The employee did not respond.
The employee worked in a number of positions before commencing
work with a new employer. That new employer also published a
magazine targeted at the commercial road transport industry.
Confidential nature inferred
The old employer alleged breaches of the obligation of good
faith and fidelity, the obligation of confidence, the
Corporations Act 2001 (Cth) and the Copyright Act
The Court accepted that the information contained in the
database, even information gathered by the employee, was
confidential. It did not matter that:
the old employer had not expressly required that the
information in the database compiled by the employee be treated
"...means of contact, including postal and email
addresses and telephone numbers of actual or prospective
advertisers in the employer's publications could be
ascertained, without a great deal of additional work, from other
sources such as the [employer's] publications themselves [or]
the 'Yellow Pages".
Accordingly, Justice Ryan granted the old employer's
application for an injunction restraining the employee and new
employer (including the employee and the new employer's
employees and agents) from using for any purpose the lists of
names, addresses, email addresses and telephone numbers appearing
on the database or databases compiled by the employee during the
course of her employment with the old employer, those databases
having been referred to by the employee in her affidavit in the
Justice Ryan also ordered that the computers of the employee and
new employer be examined by an independent expert to determine
whether there was any information on those computers from the old
employer's database. The restraint upon the employee and new
employer's use of the database information only applies until
the matter is finally determined.
Tips for employers
It is unclear from the decision whether the employee's
employment contract specified the employee's obligations in
relation to confidential information and intellectual property
owned by the old employer. In any event, the employment
relationship, even without specific contractual obligations,
involves a duty of confidence to the employer by the employee.
It is still advisable, however, for employers to ensure that an
employee's use of the employer's confidential information
and intellectual property is specifically dealt with in the
employment contract. This can assist in deterring an employee's
unauthorised use of the employer's information and provide the
employer with greater avenues to pursue the employee for breach of
contract should the employee fail to comply with their obligations
specified in the employment contract.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Long experience representing many of Australia's leading employers has taught us that in employment litigation the identity of an employee's representative is a major factor in how employee litigation runs.
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