In Digital Products Group v Opferkuch [2008],¹ a New South Wales Supreme Court recently granted an injunction restraining an employee of digital set-top box producer Toppro (Toppro) from using confidential information he kept from his former employer and competitor, Digital Products Group (Digital).

Digital sought the injunction after its former employee mistakenly sent an email to Digital (which was meant to be sent to Toppro) detailing the volume and price of set-top boxes sold by Digital. Interestingly, the employee sent Digital an additional email with updated figures, stating that he had originally miscalculated figures in the previous correspondence.

Justice White found that the information contained in the emails could not be easily stored in the employee’s mind and therefore suggested that it had been derived from Digital documents retained by the employee after his termination.

The injunction was issued to restrain the former employee’s use of the confidential documents. However, in granting the injunction, Justice White stated that an employee can use knowledge gained during their previous employment.

The Court determined that the employee’s actions constituted a breach of an equitable duty of fidelity and good faith or at least a breach of an equitable duty of confidence.

This decision highlights the need for employers to adopt appropriate safeguards over confidential information which could be used by former employees. Typically, this involves having employees sign contracts of employment with clauses covering the use of confidential information and where necessary, an employee’s restraint obligations.

The decision also highlights that employees may be able to restrict the actions of former employees even in the absence of an applicable restraint clause.

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