Protecting Confidential Information: What Belongs to the Employer and/or the Employee?

Employers will always want to ensure that their confidential information is protected. In many cases, confidential information includes contact lists and client databases. Employees, however, may consider contact lists that they have created during their employment, which contain a mixture of personal and business contacts as being "their" property.

The question of the ownership of email contact lists maintained by employees was considered in the recent High Court case of PennWell Publishing (UK) Limited v Ornstien [2007]. In this case, a former employee of PennWell Publishing sought to argue that a contacts list, which he had created during his previous employment but had updated whilst he had worked at PennWell, was a personal contacts list that was built up by him over a long period of time and which he was entitled to retain. PennWell contended that the list belonged to them to the exclusion of the employee. The issue before the Court was to whom the list belonged and, who could obtain the benefit of the list or whether indeed the list was jointly owned and could be used by both.
In a very helpful decision for employers, the Court held that where a database is made by an employee in the course of his employment then his employers are to be regarded as the maker of the database, subject to any agreement to the contrary. Therefore if the database was made in the course of employment then ownership rests with the employer.

In arriving at this decision, however, the Court gave a salient reminder to all employers that it is highly desirable that they should devise and publish an email policy. In the absence of such a policy, it may be possible for the Courts to imply a term that the employee will, at the end of their employment, be entitled to take copies of their own personal information and where this information is confidential or personal to them, to remove it from the system.

Employers who do not wish to be embroiled in such arguments with their employees or departing employees would therefore be strongly advised to have a IT policy which makes it clear that the email system is to be used for business use only and, as such, any contacts list belongs to the business.