06 June 2016

Employers are understandably concerned when senior employees leave to join a competitor. Taking legal action to enforce restrictive covenants can be costly, as can many of the other litigation routes available. A recent decision of the Information Commissioner’s Office (ICO), however, should act as a deterrent for employees thinking of joining a competitor and taking client lists with them. Not only could this leave the employee open to action by the ex employer, there is scope for a fine as well.

The ICO has reported a criminal case where an employee who left his job and took a client list to his new employer was prosecuted and fined £300 and ordered to pay £400 in costs. The ICO has reminded employees that taking client records to a new employer without permission is a criminal offence, being a breach of data protection legislation.

The employee emailed the details of nearly 1000 clients to his personal email address before he left his employer to join a competitor. The list contained personal information, such as contact details, together with commercially confidential data.

He was prosecuted in the criminal court and plead guilty to unlawfully obtaining data. The ICO has called for more effective sentences, including prison terms, to be available (prison is not an option at present) to deter breaches of the Data Protection Act.

The ICO also reminded employees that documents such as client lists that they have worked on belong to their employer and not to the employee, so cannot be taken when they leave.

Although the fine is modest, the possibility of a criminal record should act as a deterrent for employees thinking of misusing their employer’s client lists.

Contact: Douglas Strang Senior Associate dst@bto.co.uk T. 0141 221 8012