Confidentiality and your employees: Who holds the trump card?

05 April 2013

Warren Wayne

The rights and restrictions relating to the use of information tend to pass us by in day-to-day life. We generally do not dwell on whether repeating gossip over lunch or conversations overheard in the lift might be a breach of confidence or an invasion of someone's privacy. But when information is disclosed – or even recorded – without permission, many issues crystallise. At this point, the laws around confidential information, human rights and privacy converge and it is not always certain which will win out. 

In this article, we explore some of the issues which lie behind the business/employee relationship and the tensions between individual rights and corporate confidentiality rights. 

Use of Covert Recordings

Consider a situation where an employee makes covert recordings of meetings with her employer and her colleagues. Technology now allows anyone with a mobile phone to make such recordings with ease.  Whilst recording business or personal conversations in this way is widely seen as objectionable, employees who make and use them will not always be in breach of the employer's confidentiality rights. Whether or not they will depends on the context and subject matter of the recorded conversations and what the employee does with the recordings.

This issue was highlighted recently in the case of Vaughan v LB Lewisham. The Employment Appeal Tribunal ("EAT") considered an employee's request to bring 39 hours' worth of covert recordings into the evidence. Whilst the EAT described her practice of recording discussions as "very distasteful", they decided that "covert recordings are not inadmissible simply because the way in which they were taken may be regarded as discreditable" and the employee was therefore allowed to use the recordings in evidence. This is an alarming outcome for many employers.  In the right circumstances, however, there are a range of options available to prevent the disclosure and use of information obtained in this way. The relevance and the need to use these options is often dictated by the sensitivity and relative importance of the information. 

Where the subject matter of discussion is confidential and the circumstances of the conversation would have made this clear, the employer is on better ground to take the position that the recordings were made in breach of confidence. By way of example, compare a recording of a business discussion about sensitive business data held in private with a recording of discussions of last night's television drama in the canteen. The former would be seen as confidential in most circumstances, whereas the latter almost certainly won't. If there is a breach of confidence, remedies include a range of preservation, delivery up and disclosure options, the possibility of injunctions to prevent the use or reproduction of the information as well as damages.

Personal and Private Information

So, what happens if employees record information in the workplace that includes personal or private material?  In that situation, making or using the recordings may be an infringement of their manager's right to private and family life under Article 8 of the European Convention on Human Rights ("ECHR"). Article 8 is the basis on which celebrities have been able to obtain injunctions or damages awards against newspapers for publishing private information (such as the controversial case brought by Max Mosley against the News of the World) and the same remedies are available where employees make recordings infringing the privacy of their co-workers or managers.

Privacy vs. Freedom of Expression

Despite this right to privacy, investigative journalism (including covert recordings) still brings stories into the public domain. Recent examples include where the News of the World investigated spot-fixing in cricket matches and revealed information which led to criminal prosecutions. This is due to a different aspect of the ECHR; Article 10 – the right to freedom of expression. Where information is in the public interest, it can be used despite any individual's privacy rights under Article 8.  There is, however, significant tension over what is (or should be) considered 'in the public interest' and between these two rights generally.
These issues are not confined to the realm of elaborate stings and super-injunctions, they equally apply to situations where an employee goes public with information which the employer considers confidential or private. 

In the case of Hill v Great Tey Primary School, a teacher witnessed a girl being bullied by being tied up and receiving mild injuries in the playground. The teacher then told the child's parents, who had not been informed by the school and were unaware of what had happened. Then, when phoned by the press after she was suspended from work, she also told them and the story was published. Ultimately, she was sacked for breaching her obligations of confidence to the school.

An Employment Tribunal decided that her dismissal was unfair on procedural grounds.  On appeal against the compensation award, she maintained her argument that she had not breached confidentiality because she had a right to freedom of expression – and therefore the dismissal was an infringement of her rights. However, Article 10 does not give an absolute right to freedom of expression. There are circumstances in which freedom of expression can be restricted and the EAT decided that any restriction of the right to expression must be proportionate to the legitimate aim of keeping the information confidential. 

This requirement for proportionality here reflects the fact that there are always circumstances where disclosure of information in breach of confidence may be justified, such as where there is a strong public interest in its publication. An example of where disclosure of potentially private or confidential information is permitted can be seen in the law which protects 'whistleblowers'.

But where an employer has made it clear there are processes for dealing with confidential information and appropriate obligations in the company's procedures and staff contracts, it is much more difficult for employees to rely on the freedom of expression argument to override their confidentiality obligations over sensitive or valuable information. 

Interestingly, the breach of confidence in Hill does not necessarily end with the rights of the school. There is the possibility that, had they wanted to, the pupil and her parents could also have sued the employee for breaching their privacy by giving their private information to the press.

The loss of privacy in information can have huge financial and reputational impact. It can be commercially disastrous or incriminating, or it could be trivial.

Organisations that understand how to control and protect the dissemination of information are far better placed to react quickly and effectively when information comes into the wrong hands in order to prevent further use or disclosure. While many readers will be familiar with techniques and methods of ensuring control over their confidential information, these latest cases show that once the genie is out of the bottle there is still a great deal of life left in the battle between confidentiality and the trend towards freedom of information. 

For further information, please contact:

Warren Wayne