Do You Owe a Duty to Protect a Competitor’s Confidential Information?

By Gary Smith


When a new employee joins you, they are often keen to impress and make a good first impression.

Sometimes this can result in them breaching their confidentiality obligations to their previous employer and bringing confidential data to your business to gain an advantage. Often this can be in the form of client or customer details, contract terms or similar.

What should you do when you become aware of this?

The Court of Appeal has confirmed that:

  • If the circumstances are such as to bring it to the notice of a reasonable person in your position that the information, or some of it, may be confidential to another business, then the reasonable person’s response may, depending on the context and the facts, be to make enquiries with that other employer.
  • If the reasonable person would make enquiries, but you abstain from doing so, then an obligation of confidentiality will arise.
  • By contrast, where the issue is not one of primary liability for misuse of confidential information, but accessory liability for misuse by the employee, actual knowledge or ‘turning a blind eye’ may be required.

Each case is inevitably decided on its own facts.

There may well therefore be an obligation on you not only to not use the confidential information but to inform the previous employer. Turning a blind eye could lead to you being held liable for any of the previous employer’s losses.

It is also always worth considering what is likely to happen when the employee leaves your employment? Do you want someone working for you who has a track record of taking other people’s confidential business data?

If you find yourself in this situation, please contact us on 0345 646 0406 or fill in our online enquiry form and a member of our Team will be in touch.