Singapore court rules on whether unintentional keeping of confidential information violates duty
Singapore's State Courts recently dealt with an employment dispute involving a manager accused of retaining and misusing confidential information after her employment ended.
The employer brought claims for breach of employment contract and breach of equitable duty of confidence, alleging the worker retained customer databases, chat logs, and other proprietary information.
The worker's main arguments centred on challenging whether she actually retained certain documents and whether her retention was unintentional.
She argued that any retention of databases was accidental due to technical difficulties, that she did not use retained information to contact former customers, and that her conscience was unaffected by inadvertent breaches.
Manager establishes competing business
The worker started employment with the beauty treatment centre in March 2022 after signing an agreement requiring her to return all documents and materials upon termination and not retain any copies, including electronic or soft copies.
During employment, she had access to customer and leads databases in Excel spreadsheets and Google Sheets formats, and a WhatsApp chat group created for work-related instructions.
The worker was tasked with migrating the Excel database to Google Sheets, which automatically saved a duplicate version to her personal email account since the employer did not provide a company email.
She resigned in January 2024, with her last day in early February 2024. Before the employment ended, the employer arranged for the worker to transfer ownership of the Google Sheets database, supervised the deletion of business-related WhatsApp chats from her personal phone, and discovered missing WhatsApp messages.
After leaving, the worker provided similar services at a competing business she had established.
The employer discovered the worker had become a director of the competing business in December 2023 while still employed.
In March 2024, the employer found that the Google Sheets database remained owned by the worker, several former customers were patronising the competing business, and the worker retained a WhatsApp chat group log as a text transcript.
Worker challenges retention and confidentiality allegations
The worker maintained she did not retain documents with confidential information or use any allegedly confidential information.
She argued her retention of the Google Sheets database was unintentional and arose from difficulties removing access to the database she initially created.
She confirmed during the trial that she did not download any attachments from the WhatsApp chat group, including the Excel database.
The worker explained that missing customer WhatsApp messages went missing during a backup process requiring data export from her personal phone and import into the company phone.
This was necessary because she had linked the company's WhatsApp account to her personal phone, which the employer only discovered during the trial.
She argued the employer's failure to conduct a forensic examination of her phone left insufficient evidence to prove she retained copies.
The worker argued she retained the WhatsApp chat group log text transcript for two legitimate purposes: verifying commission and income payable after employment cessation, and assisting the employer should questions arise.
She further argued that her ability to contact former customers did not demonstrate database retention, as she had saved contact details on her personal phone while still employed, eliminating the need to access retained databases.
Court finds contractual breaches on database and chat log
The court found the worker breached her contractual obligation by temporarily retaining access to the Google Sheets database after employment ended.
The court accepted retention was accidental but stated "an inadvertent breach remains a breach" and noted "the absence of any pleaded implied term excusing inadvertent breaches, coupled with the clear scope of the [return clause], necessitates a finding of breach."
The court found the worker also breached her contractual obligation by retaining the WhatsApp chat group log text transcript.
The court stated "the [chat group] belonged to [the employer] for the purposes of the [return clause] as [the employer] exercised dominion and control over it" through its establishment for work-related communications and administrative control over group members.
However, the court found the employer failed to prove the worker retained copies of the Excel database or missing customer WhatsApp chat logs.
The court stated the employer's assertions were "insufficient to discharge its burden of proof" and noted the worker's retention of the cloud-based Google Sheets database does not demonstrate retention of the static Excel database as "these constitute fundamentally different media."
Court evaluates breach of confidence claims
The court found the worker breached her equitable duty of confidence by retaining the WhatsApp chat group log but not the databases.
For the Google Sheets database, the court found the worker's retention was unintentional and her conscience was unaffected, stating this "aligns with the Court of Appeal's observation that a defendant's conscience would be unaffected if the confidential information was accidentally acquired."
Regarding the WhatsApp chat group log, the court found the worker's conscience was presumed to be impinged, and she bore the legal burden of proving her conscience was not affected.
The court found "the two reasons [the worker] furnished for downloading the [chat group log] do not stand up to scrutiny," rejecting her explanations about verifying commission and assisting the employer.
However, the court found the employer failed to prove the worker actually used the information in any retained materials.
The court noted that the worker's evidence that she saved customer contact details on her personal phone while still employed was corroborated by customer testimony, eliminating the need to obtain information from retained databases after employment ended.
Court awards limited remedies
The court declined to grant injunctions for the Google Sheets database since it had already been deleted and "the possibility of misuse is remote."
However, the court ordered the worker to delete all electronic copies of the WhatsApp chat group log and provide evidence of deletion within 14 days.
The court found no basis for compensatory damages as the employer "has not demonstrated a causative link between [the worker's] breach and the damages sought."
The court declined to award equitable damages of $88,000 representing estimated lead generation costs, stating "the cost savings approach in assessing equitable damages requires some use of the confidential information," which was "absent in this case."
The court noted the employer failed to produce documentary evidence showing it actually incurred the claimed amount.
The court awarded nominal damages of $1,500 for each breach of the contractual return obligation regarding the Google Sheets database and the WhatsApp chat group log, totalling $3,000.
The court dismissed the claim against the competing business, stating that while the employer established elements for vicarious liability, the competing business was "not liable to pay [the employer] any damages since I have not made an award of damages for [the worker's] breach of her equitable duty of confidence."
Total judgment was entered for $3,000 in nominal damages against the worker, plus the deletion order.
