Report to Dâ€™Ausecours Board 31st May 2006 Re: Acquisition of Security Control – Issues and Recommendations 1) Confidential Information Given the that the greatest value of SC lies in the ability of its employees to innovate and the quality and commercial potential of the resultant product, it is disturbing to learn that none of the employees is currently bound by any form of confidentiality clause in their contract and they have received no training or even informal guidance in the correct handling of confidential information. It is, of course counterproductive to develop a culture of obsessive secrecy such as that which results in the security classification of Ministry of Defence canteen menus but a workable definition should be developed without delay. It is suggested that this accord with the criteria expounded by Megarry V-C in Thomas Marshall (Exports) Ltd v GuinlÆ’Â© including the test of whether the employer reasonably believes that the release of information will be injurious to him or advantageous to his rivals and whether it is reasonable to believe that the information is not already public.
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The information will of course have to be judged in accordance with the usage and practices of our industry. In respect of the existing unregulated situation, in the event of unwanted disclosure of confidential information prior to the introduction of revised contracts of employment, it may be possible to rely upon Faccenda Chicken Ltd v Fowler in which employees similarly had no restrictive covenant in their contract of employment. The employer argued that they were nonetheless bound by an implied duty of confidentiality. Although the decision of Goulding J at first instance was unsatisfactory from our point of view, the criteria stipulated by the Court of Appeal in order for such a duty to apply may be of assistance:
In respect of the third of these (impressing the nature of the information upon the employee) this may be the subject of immediate practical action. Once employees have been so informed, the implied duty should begin to apply notwithstanding the lack of express restrictive covenants in their contracts. The criminal law is unlikely to assist in this regard in its present form.
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