UK: Human Capital (Employment) - Whose List Is It Anyway?

Last Updated: 14 September 2007
Article by Sue Nickson

A contact list contained in Outlook or some other similar programme as part of an employer’s email system belongs to the employer. Furthermore, it is "highly desirable" that employers publish and communicate an email policy – if they do not, an employee will be entitled to take copies of his own personal information when he leaves. These are the key findings in the recent High Court case of PenWell Publishing (UK) Limited v Ornstien and Others.

The case concerned three former employees of PenWell, Messrs. Ornstien, Noyau and Isles. PenWell alleged that all three were involved in setting up The Energy Business Limited (EBG) to compete with PenWell and that they had unlawfully removed and used confidential information from PenWell for that purpose. The claims against Ornstien and Noyau were settled and so the High Court was only concerned with the claims against the third defendant, Mr. Isles.

Isles, a journalist of some seventeen years’ standing, was employed by PenWell from 1997 to September 2006 as a publisher and chairman for international conferences for the power industry. During his employment with PenWell, he created and maintained a contacts list on PenWell’s Outlook system. The list included personal contacts, journalistic contacts and contacts that he had made before he joined PenWell in addition to business contacts that he had developed in the course of his role with them. The Court found that shortly prior to leaving Penwell, Isles had downloaded his entire Outlook contacts list and taken it with him for future use.

The Court was asked to consider whether Isles had breached the terms of his employment in setting up EBG and in other things he had done in connection with it prior to leaving PenWell, but it was the parties’ respective rights to the information in his contacts list that formed the principal issue to be decided. Did the information belong to Penwell or Isles alone, to both of them, or part and part?

PenWell argued that because the contact information was prepared and maintained on their computers during and for the purposes of Isles’ employment with them, it was on its face confidential and belonged to them. They sensibly conceded at the same time that if Isles could show that any part of the information pre-dated his employment with PenWell, he could retain that part of it, though in reality this was not much of a concession given the length of his service with them. Isles sought to argue that the contacts list was his personal contacts list that he, in common with the practice of many other journalists and editors, had built up over his career. As such, he argued, it was personal information that he was entitled to retain.

Who Owned The Information?

The Court held that because Isles maintained a single list of all those with whom he was in contact for the purposes of PenWell’s business, it was not a personal list maintained by a journalist separately from his work systems and for his own use. The Court made a distinction between contact information maintained and developed by an employee for the purposes of doing the job properly (which would be commercially valuable and the removal of which would therefore be detrimental to the employer) and that of a journalist who needs to build up a collection of contacts which he can use when he needs information for his articles. The latter type of information would probably belong to the employee, but the former did not.

Consequently ownership of the database had remained with PenWell since it was created on their Outlook system and Isles was not entitled to exclusive or even shared use of it. He was, however, entitled to retain contacts made by him prior to his employment by PenWell. In the Court’s opinion, where an address list is contained in Outlook or some similar programme which is part of the employer’s email system and backed up by the employer or by arrangement made with the employer, the list will belong to the employer, irrespective of whether the information is accessed directly at work or remotely, eg from the employee’s home.

The savvy employee will therefore probably consider the maintenance of separate contacts lists for personal and professional contacts and will sadly be encouraged by this decision to keep potentially useful business contacts out of the employer’s databases. Regular checks by the employer that all the relevant names are recorded there (and clear instructions to that effect) may pay longer-term dividends.

Had Isles Breached The Confidentiality Provisions Of His Contract Of Employment?

Isles’ contract of employment contained a term prohibiting him from disclosing information of a confidential nature post-employment. The Court found that as much of the information contained in the contact list was easily available in the public domain, the individual addresses and contact details were not in themselves sufficiently confidential to amount to trade secrets. Isles was therefore not in breach of the confidentiality clause.

Was Isles In Breach Of Penwell’s Email Policy?

Whilst PenWell had sent out an email saying that "email communications, information access, and network usage is not considered private", there was no evidence that PenWell’s email policy, (and in particular the term that "Employees may only use the email system for business use") had been brought to Isle’s attention or incorporated in his contract of employment. PenWell were therefore not entitled to rely on it. In the absence of effective communication of an email policy, the Court held that employees would probably not appreciate that contact lists were the property of their employers and would, at the end of their employment, take copies of their own personal information eg details of their doctor etc. As such, it was "highly desirable" that employers seeking to prevent this should devise and publish email policies.

Had Isles Breached The "Company Property" Provision In His Contract?

Yes. Isles’ contract stated that "all documents...provided for your use by the company remain the property of the company and must be returned when your employment ceases". Having established that the information belonged to them, PenWell were therefore entitled to retain the contacts list that Isles had previously been ordered to return (subject to retaining his pre-PenWell contacts) and to a permanent injunction preventing its use.

What Should Employers Do?

  • Review existing email and computer systems usage policies to ensure that they clearly identify what information is considered as belonging to the employer. The policy should also make it clear that such property should not be removed or copied.
  • The email or computer systems usage policy should be communicated to all existing and new employees ensuring that any relevant documents are attached and, where appropriate, incorporated in the employee’s contract of employment.
  • Ensure that confidentiality and return of property provisions in contracts of employment cover contact information and clearly state what information must be protected and returned after employment.

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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