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23 May 2017
Until recently, the main attractions of a potential employee for employers were the individual's qualifications and the skills and experience that he or she had acquired in his or her previous employment. However, these qualities are not always the main values that a potential new recruit has to offer. In many cases, employees – particularly those in key roles in investment firms and corporate and fiduciary service providers – possess confidential information that can be exploited to generate income for a new employer.
There are numerous examples of businesses whose employees stole confidential information and attempted to use it to obtain a higher-paid job with a competitor or to start their own business in competition with their former employer by using the stolen information.
Invariably, the Cyprus courts have been prepared to issue injunctions restraining the unauthorised use of confidential information on the basis of ex parte applications. This confirms the great importance that the courts attach to the protection of such confidential information.
In a December 2016 decision regarding an application for injunctive relief prohibiting the unauthorised use of confidential information by the applicant's former employee, the Limassol District Court reaffirmed the courts' general approach to this matter. The case concerned the applicant's claim for damages against a former employee who had held a key position in its company on the grounds of a breach of duty of confidence and fidelity and misappropriation of confidential information. While in search of new employment with competitors, the employee had transferred confidential information regarding her employer's business – such as clientele, trade secrets and business contracts – to her personal email account.
The claimant sought and obtained ex parte injunctive relief against the former employee, prohibiting her from using, disclosing or communicating any confidential information – whether in written or electronic form – which had come into her possession during her employment with the claimant to any third party, including any future employer.
The respondent contended that the ex parte injunction should be set aside, principally on the grounds that the criteria established by Section 32 of the Courts of Justice Law (14/1960) were not satisfied and that the injunction violated her constitutional rights under Article 25 of the Constitution, which provides that "every person has the right to practice any profession or to carry on any occupation, trade or business".
Section 32(1) states that:
"Subject to any Rules of Court, every court in the exercise of its civil jurisdiction, may, by order, grant an injunction … in all cases in which it appears to the court just or convenient so to do, notwithstanding that no compensation or relief is claimed or granted together therewith:
Provided that an interlocutory injunction shall not be granted unless the court is satisfied that there is a serious question to be tried at the hearing, that there is a probability that the plaintiff is entitled to relief and that unless an interlocutory injunction is granted it shall be difficult or impossible to do complete justice at a later stage."
The court rejected all of the arguments put forward on the defendant's behalf and noted that the transfer of confidential information to her private email account was a prima facie breach of her duties and unacceptable behaviour for an employee. The court therefore made the injunctions against her final, as they aimed only to prohibit the use of the confidential information and did not prohibit her from working for a new employer, including her former employer's competitors.
For further information on this topic please contact Chrysanthos Christoforou at Elias Neocleous & Co LLC by telephone (+357 25 110 110) or email (email@example.com). The Elias Neocleous & Co LLC website can be accessed at www.neo.law.
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