Breaching Your Employer’s Confidentiality Can Lead to Imprisonment

Sharing confidential information with those outside their workplace can have serious consequences for employees, but many will be surprised to learn from one High Court case that such behaviour can even lead to imprisonment (OCS Group UK Limited v Dadi and Others).

The case concerned a cleaning company that had lost a major contract to a rival. As a result, many of those who had serviced the contract on behalf of the company had their employment transferred to the competitor under the Transfer of Undertakings (Protection of Employment) Regulations 2006.

The company was also competing with its rival in respect of other contracts and was concerned that its former employees might divulge confidential information to their new employer. It launched proceedings against one of its former workers, Jagdeep Dadi, on the basis that disclosures of price-sensitive information that he had made to his new employer breached the confidentiality provisions of his contract and the fiduciary duties that he owed to the company.

Mr Dadi did not defend the proceedings and a default judgment was entered against him. An injunction was issued that forbade him from disclosing further confidential information. He was also ordered not to disclose the existence of the order to anyone else and to preserve any relevant hard copy or electronic documents in his possession.

Almost immediately after being served with the injunction, however, Mr Dadi informed a member of the competitor’s management of the order. He also told others about it and deleted numerous messages from his email account. In those circumstances, he admitted four breaches of the order.

Mr Dadi explained that, on receipt of the injunction, he had panicked and phoned his manager, whom he trusted. He did not read the order carefully, nor did he seek legal advice immediately. He was not a criminal but had made a terrible error of judgment. Imprisonment would have a calamitous impact on his family, health and reputation and would gravely damage his prospects of finding work in the future.

In sentencing him to six weeks in prison, however, the Court noted that appropriate punishment was required to mark his deliberate breaches of the order. He had no one to blame but himself and, as the deleted emails were probably irrecoverable, the breaches had had a significant effect on the company. He had expressed remorse and thrown himself on the mercy of the Court, but the sentence was necessary to deter others from similar conduct.