The Boundary Between Secrets Which An Employer May Justifiably Regard As Belonging

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The Boundary Between Secrets Which An Employer May Justifiably Regard As Belonging To Him And Elements Of Information Which Form Part Of The Employee’s Know-How Is Particularly Difficult To Draw

Contents

TOC o “1-3” h z u HYPERLINK l “_Toc377461057” Case Facts: Faccenda Chicken Ltd. v. Fowler and Others PAGEREF _Toc377461057 h 2

HYPERLINK l “_Toc377461058” Confidence Protection under the Common Law PAGEREF _Toc377461058 h 3

HYPERLINK l “_Toc377461059” Good Faith during Employment PAGEREF _Toc377461059 h 5

HYPERLINK l “_Toc377461060” Using or Disclosing Confidential Information PAGEREF _Toc377461060 h 5

HYPERLINK l “_Toc377461061” Intellectual Property PAGEREF _Toc377461061 h 6

HYPERLINK l “_Toc377461062” Unlawful Conspiracy PAGEREF _Toc377461062 h 6

HYPERLINK l “_Toc377461063” Customers PAGEREF _Toc377461063 h 7

Introduction

Common law has a variety of interventions to cases involving civil complexities. The doctrine of the law of torts is for instance well adapted for a number of civil case intricacies. In light of the necessity to protect information within the commercial setting, equitable doctrine of common law has sufficient protection provisions for the contractual parties. Confidential information that exchanges hands within the commercial setting is protected under commercial terms to such equitable limits as would leave the employer and the employee in a safe status. It is from such a perspective that the complexity of determination of the boundary between justifiable and unjust application of employment secrets is highlighted. This is because common law attempts to offer remedies that can be contested on technicality basis such as striking the balance between the rights of the plaintiff and defendant on different perspectives. Such contestations arise from the reasonableness tag attached to common law interventions which employ various angles of view on a subject.

“But when all this is fully recognised yet the law, in some circumstances, reserves a right to say that a contract is in restraint of trade and that to be enforceable it must pass a test of reasonableness. In the competition between varying possible principles applicable, that which makes certain covenants in restraint of trade unenforceable will in some circumstances be strong enough to prevail. Public policy will give it priority,” (Tolleys Employment Law Service, 1)

In this discourse, the case facts in Faccenda Chicken Ltd. v. Fowler and Others are applied to illustrate the principles of protection of confidence in a practical case of breach of confidence. In Hull (319), it is questionable how the Court of appeal arrived at its determination of the boundaries between the secret protection element of common law and the prima facie right that the law bestows on the employer. Such is among the contestations that this doctrine draws from its application in solving various civil cases decision making complexities. Commentary is given under three distinct areas to illustrate the position held by John Hull. These areas include; facts of the case are summarized followed by a mention of various common law provisions drawn from equitable doctrine perspectives are visited and difficulties are highlighted at the end. Conclusions can be drawn to the effect that certain decisions of common law are controversial.

Case Facts: Faccenda Chicken Ltd. v. Fowler and Others In enumeration of the commercial protection of employer and employee rights, it is clear that the parties to an employment contract have distinct obligations pertaining to information applied in the line of discharging the employment contract. The plaintiff conducted business at Brackley in Northampton involving chicken farming and selling them in form of chicken meat products. Upon slaughtering the chickens, they were delivered to the market in a chilled environment so that they are as fresh as possible. The chairman of the firm, Michael Faccenda acted as the managing director on behalf of the plaintiffs and in 1973, the first defendant by the name of Barry Fowler was employed as the new sales manager. Sudden changes were introduced by the defendant by way of applying itinerant refrigerated vehicles for supplying the chicken in a move that would eliminate wholesalers in a significant segment of the market. The market was divided into regions which were allocated to specific drivers and salesmen. Customers would place orders and the supply vehicles would deliver to the customers’ premises with hope of meeting the actual demanded quantity and product for all the orders, which would vary from time to time. Since the calls were directed at the company’s offices at Brackley, the salesmen were not involved in making the negotiations (McCallum, 77).

The first defendant was arrested on the 11th of December 1980 alongside another man, on allegations of chickens going missing in the distribution chain. This resulted in the first defendant’s resignation, court charges and subsequent acquittal. Having parted ways with the plaintiff, the first defendant felt it was a wise decision to start up business venturing in fresh chicken products distributed in refrigerated vehicles. Staffing attempts for the first defendant’s new business conducted in a newspaper saw eight of the plaintiff’s employees shifting employers for the new jobs (Diller and Stower, 184). Revelations pointed at the awareness of the availability of these positions by the eight employees long before the appearance of the advert. On the other hand, the Faccenda Chicken Limited was on the deterioration path since the departure of Mr. Fowler, which was aggravated by the departure of the eight. This prompted the plaintiff’s decision of sustaining an actionable cause where proceedings against the new company were instigated at the Chancery Division.

Confidence Protection under the Common Law

In Faccenda Chicken Ltd. v. Fowler and Others, it was held that the plaintiffs’ argument was not actionable in the conditions and facts of the case. Breach of confidence was one of the obvious actionable causes that the plaintiff would heavily rely on against the first defendant as well among the rest of the employees. There are general contractual obligations that the employees at Faccenda Chicken Limited had to observe. According to Wise (1) in Exchange Communications limited vs William Masheder [2009] CSOH 135, five principles that guide the determination of the protection of the contractual parties’ rights include the following. Firstly, in terms of the obligations to be played by the contractual parties, the contract that binds them acts as the main determinant. Secondly, lack of express contractual terms does not translate to direct exemption of any party to obey their part of the contractual duties since implied terms are also enforceable.

Thirdly, good faith and fidelity act as the most important contractual obligations that employees need to observe, whether expressly stated or not. Determination of the extent of this element is however dependent on the nature of the contract. Fourthly, the conduct of the employee after parting ways with the employer with respect to commercial information and secrets obtained during former employment must not amount to disclosure of high level confidentiality directly related to the employment. Other incidental information such as that acquired in the line of employment or that which was confidential during employment can be assessed to be waivered for the former employee. Finally, the facts of the case must be assessed to determine the magnitude of implied terms in the determination of whether certain manners of conduct can amount to a breach of contractual protection of confidence and trade restriction.

Difficulties

As mentioned above, difficult decisions are involved in determining the exact boundary lines between sustainable implied contractual terms of a contract and unjust protectionist approach by the employer. Despite the possibility of enforceability of exclusion clauses, it is difficult to include all the employment terms since some arise from a case basis. Some elements of the employment contract issues include the following highlighted areas.

Good Faith during EmploymentIt must be demonstrated that the employees play their part of the contract by devoting all his productivity for the benefit of the employer’s business. Failure to demonstrate this should only arise from side commitments such as applying the internal operations secrets to benefit personal business or a third party in such a business. Breaching this element is termed as infidelity. It is difficult to monitor employees’ conduct that closely and the likelihood of determining their conduct in future employment engagements.

Using or Disclosing Confidential InformationAs observed above, it must be part of the contractual obligation that an employee does not disclose such important information as whose disclosure to third parties would occasion unfavourable business environment. The onus of this demonstration is the type of disclosure and the harm it would cause to the business, since quantification of such disclosure in financial terms is a complex process. Determining what is confidential and what appears to be confidential in express and implied terms is a tricky areas that makes things complicated for the plaintiff. The level of discretion to use confidential information is not clearly enumerable in express or implied terms. It becomes difficult to determine the nature of confidentiality in different types of business engagements (Aplin, Bently and Malynicz, 10). The requirement that the use or disclosure of such information is while under the currency of an employment is difficult to determine, since the hands of the employee are tied only to continued stay at the employer’s engagement. Further input towards establishment of such a business can be in form of intellectual transformation or even underground facilitation of another business, which would be hard to be applied as evidence for remedy by the plaintiff (Bently and Vaver, 178). Various levels of confidential information can be drawn out to assist in determining the magnitude of impact upon disclosure or use.

Intellectual PropertyIt was difficult for the plaintiff in Faccenda Chicken Ltd. v. Fowler and Others understand the application of the need for the employees to protect the business secrets and the their right to employ their knowledge and skills to earn a living. In light of the facts in the case, Faccenda Chicken Limited had different lines of operations until the arrival of the first defendant who introduced a different refrigerated vehicle supply system which soon became a productive and significant line of operation. In view of the conduct of the first defendant, it is clear that that area of specialization was part of his intellectual knowledge even before he joined Faccenda Chicken Limited. It becomes tricky for the plaintiff to demonstrate the breach of confidential information in terms of the sole business line under such circumstances.

Unlawful ConspiracyUnlawful conspiracy which is relied upon for the formation of a decision regarding fidelity could be difficult to demonstrate, bearing in mind that the terms of employment at one employer could be used as a reason for leaving or joining employment. In light of contractual obligations, the contract must be clear on the time that contractual parties are tied down by a contract. If it is an open contract in terms of duration of time that the parties are held down, it is difficult to demonstrate the contractual obligation that the employee as staying in the employment.

CustomersIn determining whether the first defendant breached confidence in terms of taking the plaintiff’s customer information, it was necessary for the judge to provide his list of compendiously important sales elements for determination of justice in the action by the first defendant after parting ways with Faccenda Chickens Limited. Such customer information as would assist in determining if the defendant acted against proper conduct regarding the former employer’s customers includes; names of the customers alongside their addresses, supply routes used by the plaintiff’s supply vehicles, customer orders in terms of quality as well as quantity, specific days in the week when customers’ orders were placed and deliveries made as well as the pricing strategy (Tolley’s Employment Law Service, 4). In terms of these elements, it must be demonstrated that the first respondent’s operations translated to application of such information without the consent of the plaintiff with every detail regarding the customer.

Works Cited

“Tolley’s Employment Law Service, Restraint of Trade: Introduction,” (n.d). Web. HYPERLINK “http://www.saradawnbridal.co.uk/gary/Tolley%27s_Employment_Law_Service2007-02-03_00-08%5B1.DOC” http://www.saradawnbridal.co.uk/gary/Tolley%27s_Employment_Law_Service2007-02-03_00-08%5B1.DOC (accessed, 25 July 2011)

Aplin Tanya, Bently Lionel & Malynicz Simon Gurry on breach of confidence: the protection of confidential information. Oxford, UK: Oxford University Press, 2011. Print

Bently Lionel, Vaver, D. Intellectual property law in the new millennium: essays in honour of William R. Cornish. Cambridge, UK: Cambridge University Press, 2004. Print

Diller, Christopher D. & Stower, Harriet B. Uncle Tom’s cabin, or life among lowly.

Hull John, ‘Faccenda Chicken Ltd v Fowler: fowl play in the Court of Appeal’ E.I.P.R. 1986, 8.10(1986):319-322

McCallum, Ron, McCallum’s top workplace relations cases. Sydney, Australia: CCH Australia Limited, 2008. Print

Neil, L. J. “Faccenda Chicken Ltd. v. Fowler and Others, Fowler v. Faccenda Chicken Ltd.,” (n.d). Web. HYPERLINK “http://oxcheps.new.ox.ac.uk/new/casebook/cases/Cases%20Chapter%2017/Faccenda%20Chicken%20Ltd%20v%20Fowler.doc” http://oxcheps.new.ox.ac.uk/new/casebook/cases/Cases%20Chapter%2017/Faccenda%20Chicken%20Ltd%20v%20Fowler.doc (accessed, 25 July 2011)

Wise, Morag “Confidentiality” 2009. Web. HYPERLINK “http://www.scotcourts.gov.uk/opinions/2009CSOH135.html” http://www.scotcourts.gov.uk/opinions/2009CSOH135.html (accessed, 25 July 2011)

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