The background

All employees are bound by an implied duty of confidentiality, which prevents them from using their employer’s confidential information for their own purposes. Once their employment ends, however, that implied duty continues only insofar as it relates to “trade secrets”.

Contact details and contacts lists will not usually constitute trade secrets. However, previous cases have established that a contacts list provided by an employer is likely to be that employer’s property. If so, the employee may not copy or use it either outside his or her employment or after the employment relationship has ended.

Until the recent High Court case of PennWell Publishing (UK) Limited v Isles and ors, it was less clear whose property a contacts list was where it included the employee’s own personal or business contacts.

The facts

Mr Isles was employed by PennWell in 1997 as a publisher and conference chairman. After he joined the company, he uploaded his personal and previous business contacts list on to PennWell’s Outlook email system. This contacts list was updated with new business contacts during the course of Mr Isles’ employment.

PennWell had an email policy which stated that its email system was only to be used for business purposes. This policy was not referred to in Mr Isles’ contract.

In 2005, Mr Isles decided to set up in competition with PennWell. He resigned in 2006, shortly before launching the new business. Before doing so, he copied his entire contacts list from PennWell’s Outlook system for his own use. PennWell became aware that Mr Isles had downloaded the contacts list and brought a claim to prevent him using it. Mr Isles argued that the contacts list was his own personal information, which as a journalist he had built up over many years.

The decision

The High Court found that PennWell’s email policy had not been effectively communicated to Mr Isles and was therefore not incorporated into his contract. If it had been, it would have been clear that the contacts list belonged to PennWell.

Even in the absence of a clear policy, however, the list belonged to PennWell and Mr Isles was not entitled to copy it in its entirety or take it away. Although the list contained personal contacts, and business contacts who pre-dated Mr Isles’ employment with PennWell, it also contained a large number of contacts that Mr Isles had used or added during his employment.

The Court went on to give the following guidance, which applies in the absence of a written policy governing the ownership of a contacts list kept on the employer’s system.

		Where the list includes personal or previous contacts, the employee is allowed to copy those contacts for his or her own use, as long as he or she does not take the whole list.
		Where the list includes information that is personal and confidential to the employee, such as the details of the employee’s doctor, banker or legal advisor, the employee should be entitled both to copy and remove those details from the employer’s system.
		Similarly, where the employee maintains personal contacts in a list separate from business contacts, the personal contacts list will be the property of the employee and may be copied and removed.
		Otherwise, in the case of a mixed list of both personal and business contacts, the list is the property of the employer and may not be copied in its entirety or taken away for use outside or after employment.

What does it mean for me?

As it is highly unlikely that an employee will be aware of the complex rules relating to ownership of this kind of information, it is important for employers to have clear IT policies that state exactly:

		whether employees are entitled to use the employer’s email system to store, send or receive personal files or emails and, if so, whether they are expected to maintain these in separate parts of the system;
		whether employees are entitled to use personal email systems during work hours and exactly what they are entitled to use these for; and
		what information stored on the employer’s systems will belong to the employer and what information, if any, will belong to the employee.

Employers who do have an IT policy need to make sure it is effectively communicated to employees, particularly if it has been amended or updated. Ideally, it should be referred to in the employees’ contracts of employment.

Employers should also check that their confidentiality policies or clauses are clearly worded and cover all information that they intend should be kept confidential both during and after employment.