Costs awarded against HR Manager for destruction of confidential information

The Supreme Court of New South Wales has awarded legal costs against an HR Manager who destroyed confidential information belonging to his former employer, Freelancer Australia (Freelancer), despite being put on notice that Freelancer intended to seek an injunction restraining him from doing so.

The HR Manager had previously given evidence (during his unfair dismissal proceeding against Freelancer) that he had copied information that was deemed by Freelancer to be confidential and/or commercially sensitive.

In June 2018, Freelancer applied to the court for orders to preserve, and provide access to, the confidential information. The application was initiated in response to the HR Manager’s threat to delete the information in his possession if Freelancer did not provide an undertaking, within a 26.5 hour deadline, that it would not pursue criminal proceedings against him.

Freelancer sought an undertaking within the timeframe from the HR Manger that he would not delete the related confidential information, and had instructed their solicitors to make an urgent application to prevent destruction of the information.

However, it was too late and the information was deleted, rendering the injunction proceedings unnecessary and creating controversy in relation to the award of legal costs, which was resolved in favour of Freelancer.

Lessons for employers

  1. Consider whether your employment agreements contain adequate protection for your business’ confidential information.
  2. Ensure you are reacting promptly to issues regarding confidential information. ‘Getting on the front foot’ early can avoid information getting into the wrong hands and will maximise the prospects of successfully obtaining injunctive relief if necessary.
  3. Consider making a preliminary discovery application or engaging a forensic IT expert when concerns exist that an employee or ex-employee with access to sensitive information may be breaching obligations of confidentiality

If you require further information, or if you would like assistance enforcing contractual obligations related to confidential information, please contact our Employment, Safety and Migration team.

This article was written by Veronica Clinch, Lawyer – Employment, Safety and Migration