See no evil – new employer breached equitable duty of confidence
In Travel Counsellors Ltd v Trailfinders Ltd the Court of Appeal considered whether Travel Counsellors (TCL) was liable to Trailfinders when it used confidential information given to it by former Trailfinders’ employees. An equitable duty of confidence arises if a recipient of information knows or has notice that it is confidential.
Several employees left Trailfinders and entered franchisee arrangements with TCL. Under the franchisee arrangements they were encouraged to bring customer contacts with them. Before they left Trailfinders, they used its databases to compile their clients’ contact and other relevant information and transferred this to TCL systems.
The High Court found that TCL’s senior management would have been aware that the information was likely to have been copied from Trailfinders’ systems. They also knew or ought to have known that Trailfinders would reasonably have regarded it as confidential, not least because TCL regarded its own similar information as confidential. TCL did not ask for information about the provenance of the information and did not want to ask. It had breached its equitable obligation of confidence to Trailfinders. TCL appealed, arguing that it could not be liable simply because a reasonable person would make enquiries as to whether some part of the information it had received was confidential. Something more was required.
The Court of Appeal dismissed the appeal. It confirmed that the recipient either had to know or be on notice that information was confidential. That was assessed by reference to a reasonable person in the recipient’s position. A reasonable person in the recipient’s position might make enquiries if it became aware that information it had received could be confidential. If a reasonable person would take those steps, but the actual recipient chooses not to make enquiries, an obligation of confidence arises. A duty of confidence does not arise only where a recipient has turned a blind eye to whether information is confidential.
On the facts of the case the High Court was entitled to find that TCL was on notice that at least some of the information passed to it by the employees was confidential. That was sufficient to make it liable for breach of the equitable duty of confidence.
Government calls on employers to support victims of domestic abuse
The government launched a review in June 2020 with a view to understanding the support victims of domestic abuse need at work, what best practice amongst employers looks like and whether current employment law provisions provide an adequate framework. The report setting out the review’s findings was published in January.
The report highlights the important role employers play in helping employees feel able to disclose domestic abuse by being on the lookout for signs of domestic abuse, asking appropriate questions and creating a supportive atmosphere. Best practice employers adopt measures such as:
- Developing comprehensive domestic abuse policies and providing details of the financial assistance, flexibility and paid leave available;
- Working with unions and specialist organisations to shape the employer’s policy and approach;
- Offering practical support such as counselling and health-related services, giving employees a private area at work to deal with issues related to domestic violence and flexibility and time off work where needed;
- Taking steps to protect an employee’s safety, such as ensuring that information about an employee, such as their workplace, is not publicly available, and providing safe parking spaces or someone to accompany an employee to and from public transport services; and
- Dealing appropriately with the perpetrators of abuse.
These steps are only likely to be successful where the approach to domestic violence is embedded in the workplace, as demonstrated by senior management leadership, signposting available internal and external sources of support and training staff to act as domestic abuse champions.
The government has confirmed that it will consult on its manifesto commitment of encouraging flexible working and making flexibility the default unless employers have good reasons not to as part of its approach in this area. It will also consult on how to encourage victims of domestic abuse to exercise their existing rights more effectively, which may suggest that specific new rights for victims of domestic abuse are unlikely to be forthcoming.
Give us your views – non-compete clauses
As we reported in December, the government is consulting on reforms to non-compete clauses in contracts of employment. Please give us your views by completing this short survey, which will inform our response to the consultation paper. All survey responses will be treated in confidence.
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