In a recent case, Singapore’s High Court found both a current and former employee of a company to have breached their duties of good faith, fidelity and confidence towards the company.
In this case, an employee of the company Tempcool Engineering was discovered to have sent documents containing information about Tempcool’s business to a former employee who, after leaving Tempcool, had joined one of its direct competitors. The documents contained copies of technical drawings, details of pricing information and filing labels, all of which was considered by Tempcool to be confidential information.
For a successful action in breach of confidence, the information must be confidential, the information must have been imparted (or received) in circumstances such as to import an obligation of confidentiality, and there must be unauthorised use of the information and detriment.
Based on the analysis of the facts, the Court considered that the drawings and pricing information were confidential but that the filing labels were not. It was found that the drawings and pricing information had been used by the employee and former employee without authorisation and to the detriment of Tempcool.
As regards the obligation of confidentiality, this was found to exist in relation to both the employee and former employee. Although the employee did not have a formal employment contract with Tempcool, the Court held that even without an express term in an employment contract there will be a duty against the use or disclosure of confidential information imposed on employees. By sending the drawing and other information to a third party, the employee had violated this duty.
As the former employee was no longer an employee of Tempcool he did not owe a duty of fidelity to the company. However, the Court held that he was a third-party who had acquired this confidential information knowing that such data had been acquired in breach of confidence and therefore was subject to an equitable duty of confidence.
The decision is being appealed in the Court of Appeal. [Tempcool Engineering (S) Pte Ltd v Chong Vincent and others [2015] SGHC 100]