Confidential Business Information A travel agency sued its former employees and their new enterprise for using its confidential data for their own interests.
Mr. La Gette (“La Gette”) and Mr. Bishop (“Bishop”) were employed by Trailfinders, a travel agency. In 2016-17, they quit to join TCL as franchisee sales consultants.Trailfinders alleged that La Gette and Bishop had taken its confidential customer data to TCL.
Trailfinders sued La Gette and Bishop for accessing its confidential dataand using it to benefit TCL’s and their own business. It also sued TCL for having allowed the use of confidential information in its business.
Trailfinderssaid that after La Gette and Bishop quit its employment, they accessed software on its website which was exclusive to employees and clients. Using these software, they accessed client names, passport details, addresses, travel history etc. (“Client Information”) and supplied that to TCL when they joined there. In doing so, they breached confidentiality of Trailfinders’ data. Moreover, TCL was vicariously responsible for the breach being the principal/employer of La Gette and Bishop.
La Gette and Bishop both said that the Client Information was not confidential because it had become part of their own experience and skill during their employment at Trailfindersand also because it was accessible from public sources. Thus, there was no breach.
TCL argued that they expected their franchisees to honour the confidentiality with their previous employers. So, they did not know whether the information supplied to them by anyone was confidential.
On the above grounds, the Defendants refuted the claim of breach of confidentiality.
The only issue before the Court was whether TCL, La Gette and Bishop had committed a breach of confidentiality.
In every employment contract, there exists an implied duty on the employee not to disclose the employer’s data or use it outside the employment, whilst the employment exists. Additionally, there also exists an equitable obligation of confidence in respect of the employer’s confidential data which continues even after the employment ends. La Gette and Bishop admitted to having accessed Client Information onTrailfinders’ software after their employment ended, but as stated above, argued that the Client Information was not ‘confidential’.
The software containing Client Information could only be accessed with a password, which meant that it was not publicly accessible. Plus,data like frequent flyer numbers and passport details was highly specific in nature and thus, information that Trailfinders indeed strove to protect.Moreover, some phone call records between La Gette and Bishop separately with some employees of TCL showed that the data being shared was too specific and voluminous for anyone to have shared simply from personal experience and skill.Although La Gette and Bishop claimed to access Client Information with the concerned clients’ permissions, there was no record of such permission being granted. Based on the above, the Court found that La Gette and Bishop had committed breach of confidentiality.
TCL argued that it did not invite potential franchisees to breach confidentiality with their extant employers. However, TCL also did not provide its own customer data to its franchisees to act upon. Thus, it was implied that any franchisee of TCL would be acting on information received from his previous employer. In fact, TCL encouraged new franchisees to disclose customer data to it. Thus, the Court found that TCL had also committed breach of confidentiality by receiving information which it knew to be confidential.
Data is a major asset of any entity. An employee cannot hijack valuable information collected by his employer and use that for his own benefit
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