An employee who holds confidential information about a competitor that he hopes to work for does not need to inform his existing employer

To do so would mean being in breach of confidence to the new employer

Customer Systems Plc v Ranson & Ors [2011] EWHC 3304 (QB)

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An employee with confidential information about a competitor he wishes to work for does not need to inform his existing employer as this involve a breach of confidence to the new employer.

An employee is normally not under a duty to disclose confidential information belonging to a potential new employer even when a direct competitor of the existing employer. The duty of fidelity an employee owes the employer means that he must serve the employer with good faith and fidelity. Whilst employed he must not compete with his own employer.

Where a fiduciary duty to the employer arises such as with directors of companies the worker must act only in the interests of the employer. In this case the High Court considered whether employees who had competed with their employer a niche computer service provider dealing mostly with database systems such as Oracle before their employment ended, were in breach of their contracts and duties of fidelity and fiduciary duties.

In the High Court's finding it decided that a senior sales manager did owe a fiduciary duty as well as a duty of fidelity. He was privy to details of inner workings of the business and in his position of responsibility had knowledge of business information that even the owner did not know about.

The manager was not however obliged to advise his employer about confidential matters regarding competition from a potential new employer (his own company 'Praesto')as this would have meant him being in breach of confidence to the new 'employer' (himself). The breach of fiduciary duty and duty of fidelity were however cause by helping the competitor to get new business even though he was still working for the old employer to whom he had a fiduciary duty.

Although there was no obligation for him to advise his employer about his setting up in business for himself he was not allowed to copy and use his employer's templates and documents.

Inducing another worker to work for him was not subject to an enforceable covenant but if there had existed then he would have been in breach. And if a worker had breached his contract in working for the new employer then he would become liable for inducing a breach of contract.

There was no breach of a post termination restriction.

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