Expert advice

A bemused chair who has rather lost faith in people

Governance | David Green | 1 Nov 2007

David Green advises a chair who needs legal clarification following the loss of the charity's membership database.

Dear Editor,

I’m chair of trustees at a charity that, for campaigning and fundraising purposes, needs an extensive list of high-level contacts. Our chief executive joined us five years ago with some contacts of her own which were added to ours. Since then, unbeknown to the trustees, she took control of our contacts database which she kept on her office computer and no other member of staff was allowed near it. Over the five years our chief executive grew the database considerably.

Our chief executive resigned in order to take up another post with a charity that competes very strongly with us for funding and she has taken the contacts database with her. When asked to return the database, she claimed the contacts database was hers and not the charity’s.

She appears to have deleted the database from her office computer (she did not save it on the server) although I’m advised that it may be possible to bring in an expert to retrieve it as completely deleting files from a hard drive is difficult to do.

We are desperate to get the contacts database as we need it to carry on with our campaigning and fundraising. We are also worried that our best contacts will now be used by the other charity.

What is the legal position? What should we do next? The matter is urgent.

Yours sincerely

A bemused chair who has rather lost faith in people

Dear bemused chair,

I read your letter with sympathy. This scenario is not uncommon and the facts of your case are very similar to a recent High Court case, PennWell Publishing UK Ltd v Isles & Ors. In this case Mr Isles, a journalist who worked for PennWell, left and set up a competing business. His employer discovered he had removed an entire contact list from his work computer. This list contained all his contacts both personal, journalistic and business-related, including those he had prior to joining PennWell as well as those built up during his employment. He argued that the list did not belong to his employer.

The High Court held that where a contact list is contained on a programme which is part of the employer’s system, the database belongs to the employer and it may not be copied or removed in its entirety by an employee for outside use or after the employment has ended. The position would have been different if he had kept and maintained a separate list of his personal and journalist contacts for his career purposes.

Therefore, as your ex-chief executive has removed the whole list solely for use in her new position with the competing charity you have good grounds for claiming it back. Also, did your chief executive’s contract contain restrictive covenants preventing her from taking or using confidential information such as lists of contacts? If so, depending on the terms, it would give your charity another means of retrieving the list and preventing her from using it.

Your next step should be to write to your ex-chief executive and her new employer to inform them of the legal position and ask for return of the database. If they do not agree, then you should consider issuing legal proceedings. Finally, does your charity have an email policy? If not, I would strongly advise you to put one in place and make it clear that addresses created and contained on the system belong to the charity and may not be copied or removed. This should prevent this kind of case arising in the future.

David Green is partner and head of employment at Charles Russell LLP

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