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Data Protection Employment Claims

The Use of Private Investigators By Employers-Caution Needed

Have you been tempted to engage the services of a private investigator to carry out surveillance on one of your employees?

Perhaps you are trying to gather evidence of breach of a restrictive covenant in the contract of employment? 

Or maybe you want to ascertain if an employee is working somewhere else or carrying on a business in breach of the contract of employment?

Restrictive covenants

Many contracts of employment contain restrictive covenants. The restrictive covenants aim to restrict the employee from doing certain things after she leaves the employment, typically 

  1. Restricting the employee from working in the industry for a certain period of time in a specified geographical area
  2. Restricting the employee from poaching staff from the old employer
  3. Restricting the employee from approaching old customers/clients with a view to moving them to the new employer, or the employee’s new business.

Whether the employer takes steps to enforce the restrictive covenant will depend on the circumstances, including the importance of the departing employee to the business and the potential damage he can cause if the covenants are not enforced.

The employer will have to weigh up the potential costs and benefits from attempting to take legal proceedings to enforce the post termination restrictions. Before commencing legal proceedings, however, the employer will need to be satisfied that a covenant is, or is in danger of, being breached.

This involves gathering evidence and the steps that the employer is entitled to take to gather the evidence.

Credit Suisse bank covert surveillance

The Credit Suisse bank was forced to apologise to a former employee, the head of wealth management, when it transpired that a covert surveillance operation was carried out due to the fear of the former employee poaching banking colleagues and clients. An independent inquiry was carried out to investigate the matter. This led to the resignation of the bank’s chief operation officer, who had gone on a solo run, and the finding of no evidence that the former employee was in breach of any restrictive covenant.

Private investigators in employment disputes

Private investigators would be frequently used in personal injury claims but not in restrictive covenant employment contract cases.

The question arises, however, as to the boundaries, having regard to privacy and data protection issues, of such operations.

In Ireland, in Sweeney v Ballinteer Community school, the principal of the school was criticised by the High Court for having a private investigator follow a teacher for four days in a dispute about bullying and harassment.

In fact, the High Court held that this surveillance of Ms Sweeney was itself ‘harassment of the plaintiff’ and could easily have tipped her into mental illness if she became aware, especially in a case which saw Mr Sweeney bring legal proceedings against the school on the grounds of bullying and harassment.

The operator of the Luas transport service, Transdev, used a private investigator to follow one of its drivers who was moonlighting as a taxi driver on his wife’s licence. The WRC decided that the decision to dismiss him for gross misconduct was reasonable.

The data protection commissioner has indicated that there must be a strong reason for surveillance before engaging the services of a private investigator.

Takeaway

If you are an employer and you believe a former employee is in breach of a restrictive covenant and you want to engage the services of a private investigator, tread carefully. You may have to justify the use of the investigator later on in any legal proceedings and you will need a sound justification having regard to the privacy and data protection rights of the employee.

Personal injury cases, however, have frequently featured the use of investigators engaged by the insurance company defending the claim and this is likely to continue.