Can employees take their business contacts with them when they leave an employer? The High Court has recently considered this issue. Naomi Flynn investigates.
Case Summary
The case in question is PennWell Publishing (UK) Limited ("PennWell") v Isles and others (2007). PennWell is a business to business media company which provides conferences, exhibitions and research to strategic global markets. The Defendant (Mr Isles) was a journalist who was employed by PennWell as a publisher and conference chairman for PennWell's international conferences for the power industry.
In 2005, Mr Isles and a colleague decided to set up business together which would compete with PennWell. PennWell subsequently discovered that Mr Isles had removed a contact list from his work computer which contained all of his contacts over the time he had been a journalist, including his personal contacts and contacts which pre-dated his employment with PennWell. Mr Isles argued that this list did not belong to PennWell and he was therefore free to take the information with him to his next venture, whilst PennWell argued that the list had been prepared and maintained during and for the purposes of Mr Isles' employment on its computers. PennWell's argument was that the information was confidential and remained its property at all times.
The issue went to the High Court, who decided that as Mr Isles had created and kept all of his contacts on PennWell's computer system which was backed up by PennWell, that database or list of information belonged to PennWell. It was held that this could even include personal and business contacts which Mr Isles had prior to joining PennWell. However, in this case PennWell had not adequately communicated its email policy to Mr Isles, which made it clear that PennWell's email system on which the contacts were included was for business use only. In the circumstances PennWell made a concession to Mr Isles in respect of those contacts pre-dating his employment with PennWell. Therefore Mr Isles was prevented from copying or removing the list of contacts for use outside or after his employment with PennWell had ended, with the exception of those contacts pre-dating his employment.
The Court noted that if Mr Isles had maintained a separate list of contacts and selectively copied those which he regarded as long-term or journalistic contacts (i.e. for use in his career rather than his employment with PennWell) and kept the list on his personal computer, he would have been able to use them. In this case however the Court found that Mr Isles had copied the list in its entirety because the information it contained would be useful to his new venture.
Useful points to note
Points to note from this case are as follows:
- There is a distinction to be drawn between journalistic or private/personal contacts, and those that are predominantly for the purpose of the employer's business.
- Employees should not keep all their contacts together in one list without differentiating between personal and business contacts.
- Employers should make their e-mail policies clear and ensure they are properly incorporated into the employment contract. These policies must identify what is considered property of the employer.
