Even if a contract does not expressly say so, anyone who receives information of a confidential nature in circumstances of confidence cannot, without permission, use that information to the detriment of the person who has communicated it. If this occurs, the Courts have the power to restrain the publication of the information and to hold the confider accountable for any profits they have received from their unauthorised use of the information.
However, proving a breach of confidence is difficult. To be successful, the claimant must show that:
- “the information itself must have the necessary quality of confidence about it”;
- “the information was imparted in circumstances importing an obligation of confidence”; and
- “there was an unauthorised use of that information to the detriment of the party communicating it”.
In practice, actions concerning breaches of confidence often concern sensitive commercial information (e.g. trade secrets, client lists etc.). We often see this arise in the context where an employee has taken an employer’s client list to start a competing business. In those circumstances, the employer may apply to the Court to seek to restrain the employee from using that information as a ‘springboard’ for their new business.
However, the practical difficulty often encountered by claimants is proving that the confider has actually used the confidential information taken. Often, there will be little to no evidence of the actual use by the confider. It is something that ordinarily can only be inferred by looking at all of the factual circumstances.
The equitable duty of confidence owed by employees to employers is well established, but to what extent does an employer owe a duty of confidence to an employee? The recent decision of Parker v Commissioner, Queensland Fire and Emergency Services (2020) 6 QR 361 dealt with this very situation.
The Facts in Parker v Commissioner, Queensland Fire and Emergency Services
In this case, Mr Parker (‘the Plaintiff’) was employed as area director of the far northern region of the Rural Fire Service, a branch of the Queensland Fire and Emergency Services (‘QFES’). He was suspended without pay, by written notice, pending the completion of disciplinary processes under the Fire and Emergency Services Act 1990. He was given no opportunity to make submissions on whether or not he should be suspended before the decision to suspend him was made.
The decision to suspend Mr Parker was based on recorded conversations between him and another employee of the QFES (‘XY’). Mr Parker had previously been requested by his then-regional manager, to keep an eye on and check in with XY, who was experiencing marked stress in connection with workplace and other issues. The recordings between Mr Parker and XY were subsequently disclosed during the course of a Workcover claim made by XY.
In respect of the recordings, they allegedly revealed that Mr Parker had disclosed confidential information, disparaged XY’s manager and stated that he was going to interfere with an employee selection process by “loading” the selection panel to select a particular person. In support of its decision to suspend him, the QFES sought to rely on the recordings submitted by XY in XY’s Workcover claim.
Mr Parker subsequently sought to restrain the QFES’ use and reliance on the recordings for the purposes of its decision to suspend him. He did this on the basis that the recordings amounted to confidential information.
The Court’s Decision
In making its decision, the Court’s focus was on whether the second element had been satisfied, namely whether the information was imparted in circumstances importing an obligation of confidence. The Court referred to the fact that XY was the party being supported during the conversations with Mr Parker. Accordingly, it was XY rather than Mr Parker, who had an expectation of confidentiality. The Court compared the case to the situation in which a psychologist counsels a client. In the latter situation, the Court opined there is an expectation that the psychologist will keep any discussions with the client confidential, but that it would be scarcely expected for the client to keep the psychologist’s contributions confidential.
Ultimately, the Court held that the circumstances in which Mr Parker made remarks to XY did not import an obligation of confidence, even though there was a ‘quality of confidence’ inherent in Mr Parker’s remarks. The Court went further to say that even if Mr Parker’s remarks were confidential, this would nonetheless be overcome by an exception to that obligation, in that there is no confidence in inequity. What the Court meant by this was that an equitable obligation of confidence cannot protect against disclosure of a criminal or civil wrong, or a serious misdeed of public importance. For Mr Parker, once the QFES had received copies of the recordings, there existed a reasonable suspicion that Mr Parker had engaged in corrupt conduct. The QFES had a duty to deal with that information.
Conclusions and How to Protect Yourself
Whether a duty of confidence arises between parties is dependent on the nature of the information and the circumstances surrounding its disclosure. Information that has been previously held to be confidential includes:
- trade secrets (e.g. product designs etc.);
- manufacturing processes;
- customer lists;
- supplier lists; and
- personal details in letters.
In protecting your confidential information, the first thing to ensure is it is stored securely and privately (i.e. it is best to ensure that it cannot be accessed by the general public). Secondly, and in the context information that is confidential to your business, having comprehensive policies and contractual terms concerning the access and use of that information by employees and third parties is equally important.
Thirdly, and if you believe that your confidential information has been accessed without your authority, it is important to preserve and not tamper with any device that you believe has been used to access the information. Often, these devices can be forensically examined to determine the extent of any breach, which in turn, can better your prospects in pursuing anyone who has taken the information and seeks to use it for their own gain.
Finally, if someone is seeking to use your confidential information as a ‘springboard’ for their business, it is important that you seek legal advice quickly as any delay can have adversely affect your ability to seek relief.
At Rose Litigation Lawyers, our lawyers are well-versed in navigating this complex field. We are determined to provide the best advice to seek to ensure that you achieve a remarkable outcome.
 Armstrong Strategic Management and Marketing Pty Ltd v Expense Reduction Analysts Group Pty Ltd (2012) 295 ALR 348, citing Coco v AN Clark (Engineers) Ltd  RPC 41, 47 (Megary J).
 Parker v Commissioner, Queensland Fire and Emergency Services (2020) 6 QR 361 .
 Ibid .
 Ibid .