Stealing a march: delivery-up of employer's confidential information

Toni Lorenzo and Alistair Hayes comment on the High Court’s decision in Nissan Motor (GB) Ltd & Anor v Passi [2021] EWHC 3642 (Ch).

Background

Ravinder Passi was previously employed as Nissan’s Global General Counsel based in Japan. His employment was terminated in November 2020. Mr Passi brought two Employment Tribunal claims, including allegations of whistleblowing, detriment and victimisation (one during – and one following the end of – his employment). On providing his disclosure in connection with these claims, Nissan realised Mr Passi had removed and retained hundreds of highly confidential and privileged documents.

Nissan successfully applied to the High Court for interim injunctions compelling Mr Passi to deliver up and destroy these documents – and to provide a witness statement detailing what use he had made of the information they contained.

Key questions for the High Court

At the application hearing in December 2021, the key areas of disagreement between the parties were whether (in accordance with the American Cyanamid principles) there was (1) a “serious issue to be tried” and (2) whether it was appropriate, in light of the “balance of convenience” principle, to order Mr Passi to delete documents that he had already disclosed in the Employment Tribunal proceedings.

Serious issue to be tried

Mr Passi’s counsel argued that sharing confidential information with his solicitor for the purposes of taking legal advice was a lawful use of that information. Individuals benefit from an important right to confidentially seek informed legal advice. The High Court did not accept this argument. His Honour Judge Keyser QC could not see “any seriously arguable case that… [Mr Passi] could have grounds for defeating a proprietary, contractual and/or equitable claim for the delivery up of the documents.” HHJ Keyser QC appeared most convinced by the express obligations to return Nissan’s property contained in Mr Passi’s contract of employment, the fact he had sought to mislead Nissan in relation to the extent of his compliance with these obligations – and the fact that Mr Passi had passed at least some of the retained information to a journalist (the latter point served to undermine Mr Passi’s argument that the documents had been removed purely for the purpose of taking legal advice).

Balance of convenience

HHJ Keyser QC was clear in his rejection of Mr Passi’s argument that requiring him to deliver up and delete the documents already included in his Employment Tribunal disclosure list would represent an interference with the processes of the Employment Tribunal. The judge commented that “it is not for a party that gains access to another party’s documents to decide unilaterally on the appropriate scope of the disclosure of the other party’s documents”. If following the delivery up, Mr Passi disagreed with the scope of Nissan’s disclosure, then he could make an application for specific disclosure in the usual way. Mr Passi was not entitled to “pre-empt the decision that… properly lies with the claimants and their solicitors.”

As to the “balance of convenience”, the judge relied on the strength of Nissan’s case, Mr Passi’s surreptitious retention of documents and the fact that Mr Passi had admittedly imparted information to at least one journalist, to conclude that the balance of convenience lay in favour of granting an injunction to remove documents from the possession of Mr Passi.

Practical observations

Employers should take steps to protect their confidential information well before litigation is contemplated. Most importantly, employers should ensure they have in place well-drafted express confidentiality provisions that clearly set out employees’ obligations, both during and after employment. These should include:

• Clear definitions of what is considered to amount to 'confidential information' – and which have been tailored to their business and the employee in question;
• A requirement to return and permanently delete company property (in all its forms) on termination of employment.

In addition, employers should be proactive in reminding employees of this obligation, in writing, on termination of their employment – and, ideally, ensuring they receive confirmation from the employee that the obligation has been complied with.

Having taken the above steps, an employer will find themselves in a far stronger position if they need to threaten legal action to prevent misuse of confidential information by new employers or other third parties.

Toni Lorenzo is a partner and Alistair Hayes is an associate, both with Lewis Silkin: lewissilkin.com