Ex-employee serves prison time for breach of confidentiality

A previous employee was sentenced to 21 days in prison following repeated breaches of compliance orders, issued by the Employment Court, to keep the details of a settlement agreement between the ex-employee and the employer confidential.

The employee began employment with the employer as an IT Network Specialist in 2005. In 2014 the employee was the subject of an employment investigation and was also formally charged, though not convicted, following a complaint from the employer, for damaging or interfering with a computer system and for accessing a computer system without authorisation during his employment.

Following mediation, the employee agreed to exit the company and the parties signed a record of settlement, which included a confidentiality clause that specifically stated that he must keep the matters arising from his employment investigation confidential.

The employee, feeling aggrieved from how his employment ended with the employer and with the criminal charges laid against him, filmed himself explaining his version of events. He made them available on his website and sent the video and a link to his website to a large number of the employer’s employees and employees of other companies.

The employer sought a compliance order in the Employment Court in 2016 and 2017 due to the employee continuing to breach the record of settlement. Permanent non-publication orders were issued in both cases and the employee was ordered to pay a $6,000 and $7,500 penalty respectively.

The Court considered the following factors, when the employee was before the Employment Court for the third time in 2017, in deciding to sentence the employee to a term of imprisonment:

  • Previous financial orders and significant cost orders did not act as a deterrent for the employee breaching confidentiality;
  • The employee resisted the financial orders;
  • There were enforcement difficulties and the employee was bankrupt;
  • The employee was offered an opportunity to take down his posts on social media, however he refused to do so; and
  • The harm created from sending the emails with confidential information to individuals and companies had already been executed and could not be undone.

A sentence of imprisonment is used as a last resort in cases of breaching Employment  Court orders. At the time of this decision in 2017 there were no other cases in which a person was imprisoned for a breach of a compliance order from the Employment Court. However, the Court has shown that compliance orders have a back bone and will be taken seriously if breached.

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