Australia: Costs Awarded Against HR for Destruction of Confidential Information

 

By Veronica Clinch © Macpherson Kelley June 14, 2019
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​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, 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 manager 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.

But 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 favor of Freelancer.

Lessons for Employers

Employers should:

  • Consider whether their employment agreements contain adequate protection for their business's confidential information.
  • Ensure they are reacting promptly to issues regarding confidential information. Getting on the front foot early can avoid information getting into the wrong hands and will maximize the prospects of successfully obtaining injunctive relief if necessary.
  • 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.

Veronica Clinch is an attorney with Macpherson Kelley in Melbourne, Australia. © 2019 Macpherson Kelley. All rights reserved. Reposted with permission of Lexology.

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