09 Mar 2017

Reputation management/media law remedies in employment disputes

It’s not a unique situation, when a former employee starts working under the cloak of darkness for a competitor or takes swathes of confidential information to benefit that competitor, or even taps up his former clients and colleagues.

The obvious port of call in such situations is the ex-employee’s contract of employment to establish both parties’ rights and the post termination obligations and restrictions on what the employee can and can’t do.

It’s much easier to threaten remedy and enforce it based on a contractual breach. But there are other remedies more familiar to specialist media lawyers which are open to an employer, particularly when there is no contract of employment to rely upon.

Depending on the circumstances, the first port of call may well be defamation or interdict based on defamatory statements. There is no reason that a company cannot sue the ex-employee for defamation where the ex-employee is bad mouthing them to their clients. A company is a legal entity separate from the individual board members of the company. It has a right of action and can sue for patrimonial losses in the form of general damages. Whilst specific losses must be averred, the courts will accept averments of patrimonial losses of a more speculative nature than it normally would, such a loss of goodwill. Unlike in English libel cases, there is no requirement in Scotland in a defamation action for companies to show serious financial loss.

Likewise, (particularly in smaller companies) the individual Directors can also sue arguing that certain practices could only have been carried out with the knowledge of a particular Director. The individual can also sue for solatium for hurt feelings.

It would also be possible to raise an action and/or interdict based on malicious falsehood or slander of business. The advantage of such a remedy is that the statement itself doesn’t have to be defamatory. If the ex-employee falsely tells your competitors that your company is on its last legs and you suffer loss, that should be enough.

Another approach lies in breach of confidence and privacy. It will be possible to prevent the passing of genuinely private information where there is a reasonable expectation of privacy.

Data Protection is often overlooked but the Data Protection legislation makes it a criminal offence to obtain or disclose personal data, including confidential information, without the consent of the Data Controller. This remedy has the added bonus of putting the ex-employee’s new employer on the back foot if they receive the confidential material removed by the ex-employee.

Finally, Copyright law allows the employer to argue that where material that appeared on the employer’s database has been downloaded, that the copying of the material is a breach. It opens another avenue for interdict and damages against the ex-employee and new employer.

Whilst the employment contract is the starting point, there are times when solicitors need to think out of the box to best protect their clients. After all the law allows more remedies than simply those in the contract.


Campbell Deane is head of BKF’s Media law practice.

BKF are the only top ranked Scottish defamation solicitors in Chambers 2016.http://www.chambersandpartners.com/11822/20/editorial/1/1#6073_editorial