Veitch Penny LLP - Exeter | Crediton, Devon

Case

PennWell Publishing (UK) Ltd v Isles & others
High Court - 18 June 2007

Issues

(1) Contract of Employment
(2) Confidential Information
(3) Ownership of Contacts

Facts

Mr Isles was employed by PennWell Publishing. At the commencement of his employment, he brought with him a list of contacts which he put onto his employer’s outlook e-mail system. During the course of his employment he added details to this list. When his employment ended he downloaded the list when he left. He had decided to set up a new business in competition with PennWell with another employee.

During the course of proceedings, the court was required to determine whether Mr Isles had breached the express terms of his contract with his employer and whether he was entitled to retain the contacts he had created. The contract provided that Mr Isles should not, during the course of employment, have any other job or be interested in any other business and despite this clause he had set up a company in direct competition with his employer. It subsequently transpired that he had, in breach of his contract, removed substantial quantities of confidential information detailing lists of customers, suppliers and advertisers.

An interim injunction was obtained to return all this property and an examination of Mr Isles’ computer disclosed that he had created a list of contacts through the outlook system. Whilst the proceedings were compromised, issues arose as to whether he was entitled to retain this list.

He argued that this list contained his personal contacts as well as contacts which pre-dated his employment and only 20% of the contacts were added whilst he was an employee of PennWell and therefore the contact list was his personal information. To deprive him of it would be in breach of Article 10 of the European Convention on Human Rights relating to freedom of expression on the basis that the quality of his journalism would be compromised since he would have to disclose the PennWell confidential sources. The employer argued that the list had been compiled during the course of his employment and was therefore to be regarded as the employer’s confidential property.

Decision

The court held that Mr Isles had acted in breach of the term of his contract. In respect of the issue of the address list, as the list was contained on the employer’s e-mail program and backed up by that employer then the list on the database belongs to that employer. Consequently, they could not be copied or removed in their entirety by employees for use outside their employment or after their employment came to an end. In addition, he had not removed it for the purposes of maintaining those contacts but in order to have the widest possible list of contacts for the purposes of the new business. The employer had owned the list at all material times and Mr Isles was not entitled to exclusive or shared use of it. The employer was entitled to retain the database and to a permanent injunction preventing the use of it.

Comments

The court went on to comment that it would be useful for employers to devise an e-mail policy which makes it clear when e-mail can be used for personal use. Had Mr Isles kept the list in a personal folder then he would be entitled to develop and maintain that list. Not only should an e-mail policy be clearly drafted but it should also be properly incorporated into the employee’s contract clearly identifying what is considered to be the property of the employer.

Rachel Billen - Associate Solicitor, Commercial Department at Veitch Penny.
Tel: 01392 278381, Fax: 01392 410247, Email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

This Employment Law Update does not constitute legal or other professional advice and should not be relied on as such. You should take specific advice regarding your circumstances before taking any action based on the information contained within this Update.