Breach of confidentiality may be a serious misconduct, justifying the dismissal of an employee. Additionally, in regulated sectors such as banking and insurance the misuse of confidential client information by regulated persons could give rise to fines by the relevant authority.

In March 2017 Christopher Niehaus, an employee of Jefferies International Limited was fined c.£37,000 by the Financial Conduct Authority (FCA) for beach of confidence. Under FCA rules Mr Niehaus, who was the managing director of the investment banking division, was an approved person and subject to FCA conduct guidelines. In breach of these, he used the messaging app WhatsApp to send details of transactions that he was involved in through his position at the bank. This was confined mainly to bragging to a friend and an acquaintance of his involvement in deals and the sums he would earn as a result of the transactions. His messages included the identity of a customer of the bank. Although there was no suggestion of any financial gain by Mr Niehaus through his misuse of confidential information, the FCA clearly took a dim view of the matter. On its website, the regulator stated that the fine would have been significantly larger had Mr Niehaus not made an admission of his wrongdoing at an early stage of the misconduct procedure.

The case is a salutary warning to employees, especially in regulated sectors, of the seriousness of committing breaches of confidentiality related to the workplace. However, employers won’t often be able to rely on regulators to police this area and they should ensure that they are adequately protected against the misuse of data by staff belonging to the employer (or its customers). The protection given to confidential information under common law is limited. It only prohibits the unlawful disclosure of trade secrets or similarly confidential information. It does not protect all information that an employer might believe is confidential such as details of customers and their requirements.

Employers should therefore ensure that contracts of employment of staff together with staff handbooks and policy documents are robustly drafted with adequate provisions to protect confidential data. Without this, taking appropriate action including possible disciplinary action against an employee is likely to be more difficult.

If you have any questions about this subject or any employment-related legal issues, please contact your dedicated employment law solicitor. Alternatively, please call us on 01483 411 533 and we would be delighted to assist you.