Singapore: Breaches of confidentiality and duties of good faith and fidelity

A recent decision of the Singapore High Court has emphasised the value for employers in taking steps to protect confidential information.

In Tempcool Engineering (S) Pte Ltd v Vincent Chong, the primary issue was whether the employees misused confidential information in breach of confidence. The applicable test was found to be whether: (i) the information possessed the necessary quality of confidentiality; (ii) the information was imparted or received in circumstances such as to import an obligation of confidentiality; and (iii) there was unauthorised use of information and detriment suffered.

Various technical drawings of the employer (whose business is the engineering, supply and design of refrigeration and air conditioning systems) were found to be confidential information: they were password-protected and kept in a contained environment, and had value, allowing the employer adapt precedents for new projects. The employee’s acts in sending and receiving them therefore constituted a misuse of confidential information.

The company’s pricing information was also found to be confidential. Misuse was easily evidenced as the former employee could structure his new venture’s bids on project tenders to beat offers by the employer.

Although the first employee did not have a formal employment contract, he was found to owe an implied obligation of confidentiality. The former employee was found to owe an equitable obligation of confidence, as a reasonable man in his circumstances would have known the information was given in breach of confidence.

Actions for employers

Employers should take reasonable steps to protect information, for example, through passwords, information barriers and internal sign-off barriers etc. This helps show the information was confidential when claiming a breach of confidence.

For more details see our e-bulletin article.