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Introduction
remain confidential. This is particular vital in the global era where there is lower job
security, higher job mobility and situations where employees work multiple jobs.
Employees are bound by the duty of confidentiality, where they are forbidden to
The purpose of this paper is to explore the nature and extent of this duty of
confidentiality and legal options available to the employer if this duty is breached.
The main focus will be on the application of this duty towards customer lists.
Williams,3 Chief Justice Brennan stated that what is important is the nature of the
to remain confidential.
1
osemary Owens, Joellen iley and Jill Murray, The Law of Work ^2nd ed, 2011) 267.
2
Ibid.
3
^1996) 186 CL 71.
4
Ibid 71, 80.
ÿence, the duty of confidentiality is equitable, as it imposes a personal obligation on
This has been unanimously approved in the ÿigh Court Case 3arah Constructions Pty
President Kirby further developed this doctrine by listing factors which helps in
Factors which suggest that information is confidential are if it required skill and effort
to acquire, whether the employer had guarded the information cautiously, or the
In Dale Casale v Artedomus,9 it was decided that public information was not
^Triangle Corp Pty Ltd v Carsnew10) because know-how and skill cannot be restrained
or taken away. This reinforces the idea that labour is not a commodity.
5
Owens, iley and Murray, above n 1, 268.
6
^2007) 230 CL 89, [118].
7
^1991) 39 I 256.
8
Wright v Gasweld Pty Ltd ^1991) 39 I 256, 271.
9
^2007) 165 I 148.
10
^1994) AIPC 91-099.
ÿumans have the capacity to develop their skills and knowledge which ultimately
In obb v Green,12 an employee does not have the right to take away a list of customers
under the duty of confidentiality, because it requires µskill and effort¶ ^Wright v
The rationale is that many effort and time had been invested into building a customer
list, and it would be unjust if someone takes something away that took years to
develop.
Equity would balance the µspringboard¶ effect enjoyed by the former employee by
It is notable that the remedy will only be for a certain period to negate the unjust
It should be noted that if the employee conjured the customer list using their memory,
there will be no breach of duty ^3accenda Chicken v 3owler)16 because it is part of the
11
Owens, iley and Murray, above n 1, 267.
12
^1895) 2 QB 315.
13
^1991) 39 I 256.
14
(1987) Ch 117.
15
Owens, iley and Murray, above n 1, 270.
16
(1987) Ch 117.
What can the employer do to protect their interests?
Employers can prevent information from being disclosed using an express covenant,
but the restraint must be reasonable and it will be nullified if it is an illegal restraint of
trade.17
The aim of an express restraint is to protect the employer¶s legitimate interest, which is
connections¶. 18
The type of information that the employer wishes to prevent from being disclosed
must meet the criteria of confidential information outlined in Wright v Gasweld Pty
Ltd,19 to ensure that employers do not restrict usage of publicly available information
But an issue arises when the employer wishes to protect secret business strategies and
techniques, which would likely satisfy the criteria of confidential information in Wright
v Gasweld Pty Ltd20 but it can also become part of the employee¶s know-how and skill.
Whether the express restraint would be an illegal restraint of trade is outside the scope
of this paper, but if it is enforceable then the former employee will be obligated to
17
Owens, iley and Murray, above n 1, 272.
18
Ibid.
19
^1991) 39 I 256.
20
Ibid.
Given that the duty of confidentiality exists in equity, equitable remedies such as
injunctions, equitable compensation or account of profits are also available for the
employer.
For example, in ÿalliday & Nicolas v Corsiatto,21 the former employer was awarded
an account of profits for 12 months after a former employee took the customer list to
another competitor.
Equity recognises that the employee must compensate the employer for deriving
benefit from that list, but the remedy will only last temporarily to negate that unjust
advantage.
Conclusion
In conclusion, the duty of confidentiality mainly exists in equity, but can have
The most important factor when determining the existence of a duty of confidentiality
is whether the relationship between the employee and employer is one of confidence.
The scope of this duty extends to post-employment, protecting the employer¶s interests
because information such as customer lists requires a lot of effort, commitment and
time to develop, and it would be unjust if that benefit is taken away without
compensation.
21
^2001) NSWCA 188.
But equity will act just enough to remove the unjust advantage gained by the former