Santiago Nadal and Mònica López worked with Andrew Rayment and Andrew Strong (Walker Morris) on a case about Unfair Competition and Agency Law. This is a summary by Andrew Rayment and Andrew Strong.
Beware the quick resignation – it may be hiding something…
“Knowledge is power”, as the old saying goes. In the modern, inter-connected world, where vast quantities of information are stored in electronic format and can easily be transmitted globally within a matter of seconds, companies in all markets and of all sizes are rightly concerned about the negative impact it would have on their businesses, were their confidential information (for example, their product lists, their pricing structures, their client databases etc.) to fall into the hands of their competitors; even more so if the disclosure comes at the hands of an unhappy employee or contractor, who can readily use the information and explain to a competitor how to take full advantage of it.
The legal framework for enforcing a company’s rights in its intellectual property can prove a minefield in one jurisdiction, never mind in other countries and across frontiers. We at Walker Morris LLP have had recent experience of such set of circumstances, when the local knowledge of our on-the-ground colleagues at SNAbogados proved crucial in achieving the desired outcome.
Our initial contact with Santiago Nadal and his team came more through a request for general advice on Spanish Labour and Agency law. We were instructed to act on behalf of a UK-based company that had engaged a number of commercial agents in the Iberian peninsular and were looking to better understand its position and the local legal requirements for amending or terminating the existing relationships, with a view to engaging the same individuals as self-employed consultants. All was going smoothly, with clear and concise advice from Santiago as to how best our client could achieve its objectives when, suddenly, one of the agents gave notice to terminate his arrangement.
Whilst ordinarily he was within his rights to do so, our client was concerned as to his motivation, in particular given some talk it had heard that he was planning to move to a competitor. Matters rapidly progressed when the client discovered that, within minutes of emailing in his notice, the agent had sent various computer files containing highly sensitive confidential information to his personal email account.
So as to protect the client’s interests and to prevent the agent from making any misuse of the confidential information, we swiftly initiated a twin approach in close collaboration with Santiago and his team:
The agent was based in Spain, had conducted his work for the client almost exclusively in Spain and the transmission of the confidential information had taken place in Spain. Santiago’s team explained the relevant laws relating to unfair competition and the means (through the Courts and otherwise) to prevent the agent from making unauthorised use of the confidential information. This advice ultimately culminated in the dispatch of letters to the agent informing him that our client knew what had happened and inviting him to sign undertakings to the effect that he would not use the information to engage in unfair competition;
In the UK, we backed up the main thrust in Spain by writing to the agent to inform him that our client was also prepared to bring actions before the English courts against him and any prospective competitor-employer if it had any evidence the confidential information would be used in contravention of its rights here.
In the face of this concerted strategy, the agent saw no option but to sign the undertakings, and confirmed to our client that he no longer had any of its confidential information in his possession. The client’s position was therefore secured.
We consider this to be an excellent example of the benefits of, and genuine need for, close collaboration with colleagues in the legal profession, not only across disciplines but also across borders. Without the expertise that Santiago and his team were able to bring to the effort to protect our client’s confidential information, together with their connections across Spain, we wonder if so positive an outcome would have been achieved, or indeed whether the client would have been able to defend its interests under Spanish law if more formal proceedings had been required.
In conclusion, in light of the scenario we describe above, we would invite you to consider the following three points:
- Is your confidential information protected, both in the country or countries where your business is based and also in any other jurisdictions where you have people (whether employees, agents or otherwise) acting on your behalf?
- What systems do you currently have in place to monitor the use made of your confidential information, and are the policies and technologies you have in place sufficiently robust to prevent misuse?
- In the event that something does go wrong, have you considered the strategies you will adopt, if necessary on a jurisdiction by jurisdiction basis, to protect your interests?
If you are in any doubt as to whether the answer to any or all of the above questions is “yes”, we at Walker Morris LLP, together with our colleagues at SNAbogados and at other firms in numerous jurisdictions around the world, are here to help, giving honest, straight-talking, commercial advice. Please do not hesitate to get in touch to discuss any issues you may have surrounding this area.
