Employees now face prosecution for unlawfully obtaining client data

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Employees now face prosecution for unlawfully obtaining client data

14 Jun 2016

It’s a familiar scenario to employment litigators; an employee makes off with confidential information (through means varying significantly in their sophistication) in order to give their new business or a rival employer a competitive head start. 

The means available to employers to restrain and seek recompense for such conduct include an application for a springboard injunction, and a claim for damages and/or an account of profits. Fortunately for employers, the cards are currently stacked in their favour, as the current judicial approach empowers them to clamp down on these actions – with a willingness shown at the interim stage to impose injunctions, pending a speedy trial.

Alongside this, the Information Commissioner’s Office (ICO) also appears to be taking a more active, hardline approach towards enforcement. Client data taken often includes commercially sensitive information, such as contact details and the purchase history of customers – which also amount to “personal data”.

Recently, two successful prosecutions have been brought against errant ex-employees under Section 55 of the Data Protection Act 1998, which states that the knowing or reckless obtaining or disclosure of personal data – without the consent of the data controller – is an offence, as is selling or offering to sell the data obtained. Whilst the ICO has called for custodial penalties for DPA breaches, in these cases the former employees were fined £300, but were also ordered to pay costs and a victim surcharge, bringing the amounts payable to £944 in one case.

Whilst the level of fine does appear low in contrast to the seriousness of the breaches and the potential remedies available from civil action, the deterrent effect of a criminal prosecution cannot be underestimated. Nor should it be overlooked that where data is passed to the new business or employer, they too could be liable for this offence.

It is doubtful that many employees fully understand that obtaining data unlawfully could expose them to prosecution – a point that, for deterrent value, can usefully be made within contractual confidentiality clauses and policies.

To speak to one of our experts about this or any aspect of employment law, please contact us or call partner Sally Bird, on 0161 832 3434.

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