The enforceability of non-disclosure agreements:
In ABC v Telegraph Media Group Ltd, the Court of Appeal this week granted an interim injunction to prevent the Daily Telegraph from publishing information obtained via alleged breaches of non-disclosure agreements (NDAs), pertaining to alleged misconduct by a senior executive.
The Appellants, in this case two companies within the same group structure and one of the group’s senior executives, were seeking to prevent details of complaints raised by five of their employees from entering the public domain. Two of the employees had brought tribunal proceedings relating to the discreditable conduct of the senior executive. The claims were settled privately, with the complainants receiving substantial payments and signing NDAs.
The Respondent, despite being aware of the existence of the NDAs, approached the complainants for comment with the aim of publishing a story about the allegations against the senior executive. The Appellants applied for an interim injunction to prevent the publication of any information relating to these allegations, which, they sought to argue, had been obtained in breach of confidence and in breach the abovementioned NDAs.
The High Court rejected the application, on the basis that the Appellants would be unlikely to succeed at full trial, and held that public interest in this case outweighed the confidentiality of the information. The Appellants appealed.
The Court of Appeal allowed the appeal and granted an interim injunction, which prohibited the disclosure of the identity of the senior executive, the details of the alleged misconduct and the terms of the NDAs. While the identity of the senior executive has since become public knowledge, following a disclosure made in Parliament (by virtue of Parliamentary privilege), the decision of the Court of Appeal still stands.
Whilst it remains to be seen whether the interim injunction will be upheld at full trial, this case should serve as a reminder to employers of the risks and potential issues that may arise when utilising NDAs to cover up potentially inappropriate behaviour.