A recent High Court judgment on the ownership of an Outlook list of “Contacts” highlighted the critical question of who owns such a list when it has been created in a business. Is it the employer or the employee?
In PennWell Publishing v Ornstein [2007] EWHC 1570 Mr Justice Fenwick came down on the side of PennWell, the employer, regardless of the fact that the employee had incorporated his own “personal” contact information into the database as well as information he had brought with him at the time he started the job.
The judgment makes interesting reading for anyone who has been or may be involved in a situation where employees (often at a relatively senior level) leave a business to set up in direct competition. It is the sort of thing that happens all the time, whether or not the parties end up in court.
Anyone who has worked in any business will be familiar with employees either taking home or sending themselves contact lists, precedents, or presentations in digital form. It is now so easy to do, that employers find it very difficult to protect what they perceive to be “confidential” and proprietary information.
Essentially, this case was about employees leaving PennWell Publishing, the UK arm of a US business to business media publishing group, to set up themselves up in competition. It involved an injunction which was initially granted on PennWell’s behalf, allegations of dishonesty and even court orders providing for forensic examination of a personal computer which belonged to Mr Junior Isles, who was one of the employees and a defendant in the case.
Mr Isles had taken a copy of his Outlook database with him, albeit in the form of an Excel spreadsheet just before he left PennWell’s employment on the basis that the information in his contacts database belonged to him. PennWell claimed amongst other things that the information in that contacts database actually belonged to them.
PennWell claimed they had an email policy which stated that “employees may only use the email system for business use”. Unfortunately, PennWell were unable to prove that Mr Isles was aware of the policy or that it had been incorporated into his contract of employment. Although they could show he had been sent an email about it, PennWell were unable to prove that the relevant “”Network Access Policy” and “E-mail Policy” had been attached to that email.
As the Judge said:
“In my judgment, had that email policy been effectively communicated to Mr Isles, it would have been clear to him that the email system provided to him was to be used only for business purposes and therefore, that in adding to or maintaining contact details on that system, he was doing so exclusively for the employer’s benefit and not his own.”
In the absence of the effective communication of that policy (and all employers need to take note of the importance of effective communication) the Judge felt that the status of such address lists was a “difficult issue”.
“On one view, these lists plainly consist of confidential information of the employer. They include details of the individuals with whom the employee is expected to and will have made contact during his employment for his employer's purposes. They are backed up, generally, on a system maintained or at least paid for by the employer.”
“On the other hand, in the new electronic age, electronic address books, whether on mobile telephones, communicators or e-mail systems, are inevitably used by individuals, whether employees or executives, for the convenient storage of those that they wish to contact. In the absence of a declared e-mail policy, it may well be that such employees will use such systems, including on mobile telephones provided for their use, for retaining the records of all sorts of contacts, from personal friends and family, through friendships that they have developed in work and journalistic contacts of the kind I have referred to above, through to the normal business contacts of their employer".
For all these preceived difficulties the Judge did not appear to find too hard to come down on the side of the employer in this case and concluded that the database “has at all material times been with PennWell since it was created in the Outlook system of PennWell and that Mr Isles is not entitled either to exclusive or shared use of it.”
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