Judges are usually also at a disadvantage in dealing with applications for protection of confidential information described in technical language, such as the electric circuitry etc. It may look like magic but may turn out merely to embody basic scientific principles that do not warrant protection.
Even in cases where an employer has strong evidence that an employee has taken what is undoubtedly specific confidential information, such as a list of customers, the court must employ a graduated response. There must be proportionality between the perceived threat to the employer and the remedy granted. The fact that there is overwhelming evidence that the employee has behaved wrongfully in his commercial relationships does not necessarily justify an Anton Piller order.
Anton Piller Order
Anton Piller orders are frequently sought in actions against former employees who have joined competitors or started competing businesses of their own. In many cases it will be sufficient to make an order for delivery up of the employer's documents, an order that the employee preserve the documents, or allow the employer's solicitor to make copies.
The more intrusive orders allowing searches of premises or vehicles require a careful balancing of, on the one hand, the employer's right to recover his property or to preserve important evidence and on the other hand, the violation of the privacy of an employee. The making of an intrusive order to search an employee's dwelling can be humiliating and distressful to his family. Such intrusive order should only be made when there is a paramount need to prevent a denial of justice to the employer .
The duty of confidentiality
The obligations of good faith and confidentiality of an employee are usually found in the employment contract. If the contract does not contain a term on this, the obligations are deemed to exist as implied terms in the employment contract. The duty of good faith varies according to the nature of the employment contract. For some, the duty of good faith will be broken if an employee makes or copies a list of the customers of the employer for use after his employment ends or deliberately memorizes such a list.
After his employment, there is an obligation not to use or disclose confidential information such as chemical formula, exclusive designs or other information which amount to a trade secret. The obligation does not extend, however, to cover all information acquired by the employee during his employment.
On the one hand, the court seeks to uphold the obligation imposed on an employee under an employment contract. On the other hand, the court recognises the rights of employees to work for competitors and to seek better opportunities elsewhere. It is also desirable that an employee should be free to share his skills and experience. For these reasons, the courts will strike down unfair terms on restraint of trade.
If an employer alleges that he is in possession of a secret process or possesses confidential information and that the employee has wronged him by using or disclosing that secret process or confidential information, he must state clearly what is the nature of the process or information in which he seeks to protect.
A Case
A company XXX imports industrial equipment and sells them to its customers in Singapore and to foreign companies. Over the years, it has built up a lucrative and profitable business in Singapore and in the region.
WWW works as a technical sales manager in XXX. Clause 10 of his contract of employment states:
.....you are not permitted to divulge to those not employed by the company any relevant or confidential information or matters which concern the company's affairs....
WWW resigned from XXX to join a competitor, YYY.
XXX sues WWW for breach of contractual and fiduciary obligations. The new employer YYY was also sued. XXX sought an injunction restraining WWW and YYY from conspiring to injure its business interest.
XXX obtained an injunction as well as an Anton Piller Order. The injunctions restrained the employee from disclosing and making use of confidential information which includes:
(i) a list of names and addresses of suppliers;
(ii) various distributorship agreements;
(iii) list of names and addresses of customers;
(iv) list of prices quoted to various customers;
(v) invoices; and,
(vi) various confidential correspondence.
The injunctions also restrained WWW and YYY from:
(a) Approaching the suppliers of the XXX for business.
(b) Placing or soliciting orders for the supply of goods from XXX's suppliers.
(c) Soliciting orders from customers of XXX.
The Anton Piller order facilitated the seizure from WWW documents containing the names of suppliers and customers of XXX, quotation prices; and various agreements entered into by XXX with their suppliers. Although these documents were prepared by WWW when he was in the employment of XXX, they are no less the property of the employer. Trade secrets are not limited to manufacturing processes only.
An employee is entitled to set up business in competition with his former employer after leaving his employment and to use all the skills and knowledge which he has honestly acquired during his employment. But here what the employee had done was not only that; there was clear evidence that the employee took with him XXX's price list, customers' list, copies of the export sales distribution agreements and correspondence of XXX.
See below for a writ of summons and an application for injunction against an employee
WRIT OF SUMMONS
IN THE HIGH COURT OF THE REPUBLIC OF SINGAPORE
Suit No. 1055 of 2000 V
Between
CCA Overseas Ltd
(Registration Number F10534G) ... PlaintiffsAnd
Wong Soon Seng
(NRIC No. 1366802G) .................DefendantTo: Wong Soon Seng of No.155 Sentor Road #03-07, Singapore 789097.
THIS WRIT OF SUMMONS has been issued against you by the abovenamed Plaintiff(s) in respect of the claim indorsed herein. W ithin eight (8) days after the service of this Writ on you, counting the day of service, you must either satisfy the claim or cause an appearance to be entered for you and in default of your so doing the Plaintiff(s) may proceed with the action and judgment may be entered against you without further notice.
Dated this 4th day of December, 2000.
Registrar
Note: This Writ may not be served more than 6 calendar months after the above date unless renewed by order of Court.
The defendant(s) may enter an appearance(s) either personally or by a solicitor at the Registry of the Subordinate Courts
If the defendant enters an appearance, then, unless a summons for judgment is served on him in the meantime, he must also serve a defence on the solicitor for the plaintiff within 14 days after the last day of the time limited for entering an appearance, otherwise judgment may be entered against him without further notice.
____________________________________________________________________________
STATEMENT OF CLAIM
THE PLAINTIFFS
1. The Plaintiffs are a Company incorporated in the United States of America and registered in Singapore.
2. Their registered address is 331 Sims Drive, #01-08 RLL Building, Singapore 387383. The Plaintiffs are a subsidiary and a branch office of CCA International Inc. ("CCA"), a company incorporated in the state of Massachusetts, USA.
3. CCA is major supplier of circuit processing systems. CCA designs, manufactures, sells and supports advanced thermal processing systems used primarily in the assembly of printed circuit boards and in advanced semiconductor packaging. CCA is the market leader in solder forming systems used by contract electronics manufacturers and electronics original equipment manufacturers. CCA also produces custom thermal processing systems that are engineered for a variety of customers.
4. Globally in calendar year 2000, CCA had an estimated turnover of US$150 million.
5. CCA has several branch offices worldwide. The Plaintiff is one such branch office. The branch offices, including the Plaintiffs, are primarily concerned with sales and service support of the solder forming equipment, furnaces and spare parts made by or provided by CCA.
6. The main business of the Plaintiffs is to oversee and manage the growth of sales and support services for CCA in Singapore, Malaysia, Indonesia and the Philippines.
THE DEFENDANT
7. The Defendant was appointed as Sales Director, South East Asia of the Plaintiffs by a letter dated 24 April 1996 ("the Contract"). The Defendant signed the Contract on or about 5 May 1996.
8. The Defendant's role as Sales Director required him to manage the growth of sales and support services of CCA in Singapore, Malaysia, Indonesia and the Philippines. This is an important role as the annual turnover for CCA for South East Asia is approximately US$12 million.
9. The Plaintiffs also had direct management responsibility for CCA employees in Singapore, Penang, and the Philippines.
10. The Defendant's employment with the Plaintiffs required him to travel to meet with customers and potential customers in the South East Asia region. In the course of his work, the Defendant had free access to CCA's and the Plaintiffs global customer lists, pricing, costs, pricing strategies, regional market strategies, technology, including new technology. The Defendant also had access to information on any deficiencies in technology of CCA products, new product information and design. All this information and knowledge was information that CCA and the Plaintiffs regarded as confidential.
11. In October 1999, the Defendant attended a global strategy meeting of the top tier of CCA's international management in New York. During this meeting, key strategic issues were discussed, including CCA's and the Plaintiff's new technologies, pricing strategies, costs and strategic marketing and product positioning. The Issues discussed related to CCA's global positioning, including its (and the Plaintiffs) position in South East Asia.
THE CONTRACT
12. The Contract was signed in Singapore and is governed by Singapore law.
13. The third paragraph of the Contract states
"During employment you. will be bound by the terms and conditions of employment which apply in Singapore. As we have discussed, it is expected that CCA Personnel policies and benefits will be adapted to comply with Singapore Custom and Practice. Enclosed you will find a copy "The Employee Patent and Information Agreement" as well as a copy "Policy on Conflict of Interest". All CCA employees are required to sign both documents upon commencement of employment "
14. One of the clauses in CCA International Employee Patent and Information Agreement ("the Restrictive Covenant") states
"I will not, for a period of twelve months after termination for any reason of my employment with CCA, initiate any activity which is directly competitive with CCA or assist any other in initiating or engaging in any activity directly or indirectly in competitive with CCA or any of its products, either individually or with any third party."
BREACH OF RESTRICTIVE CONVENANT
15. The Defendant resigned from his position and his employment was officially terminated on 31 March 2000.
16. In or around October or November 2000, in breach of contract, the Defendant initiated discussions with Yorkee Technologies Asia ("Yorkee"), a competitor of the Plaintiffs and CCA, to seek employment with them. Yorkee carry on business worldwide as suppliers of similar or the same products and services as the Plaintiffs and CCA and are a major or global competitor of CCA and the Plaintiffs.
17. The Defendant threatens and intends, unless restrained by this Honourable Court from so doing, to breach the Contract.
18. By reason of the matters aforesaid, in the event that the Defendant takes up employment with Yorkee, the Plaintiffs are likely to suffer loss and damage in that Yorkee will obtain, from the Defendant, sensitive information about CCA and the Plaintiffs. Such information would include, inter alia, CCA's and the Plaintiffs' customer list, pricing, cost, and technology, including new technology. This is information that Yorkee would not be able to get anywhere else.
19. Such loss and damage is likely to be irreparable by way of damages, but in any event, the Plaintiffs will seek to recover full compensation by way of damages in respect of all the acts committed by the Defendant in breach of the Contract.
AND THE PLAINTIFFS CLAIM
(1) An injunction to restrain the Defendant in Singapore from taking up employment with Yorkee before 31 March 2001;
(2) An injunction to restrain the Defendant in Singapore from taking up any employment before 31 March 2001 with any other competitors of the Plaintiff and/or CCA, including, but not limited to, Persaw Pte Ltd, the Tower Group of companies and/or branches of the aforementioned companies in Singapore;
(3) Full discovery as to all acts by the Defendant in breach of the Contract;
(4) Costs;
(5) Interest; and
(6) Such further or other relief as this Honourable Court deems fit.
Dated this 15th day of December 2000.
This Writ is issued by Messrs M/s Tan Peng Long & Co, Solicitors for the Plaintiffs of 331 Sims Drive, #01-08 RLL Building, Singapore 387383.
______________________________________________________________________________
IN THE HIGH COURT OF THE REPUBLIC OF SINGAPORE
Suit No. 1055 of 2000 V
Between
CCA Overseas Ltd
(Registration Number F10534G) ... PlaintiffsAnd
Wong Soon Seng
(NRIC No. 1366802G) .................DefendantSUMMONS-IN-CHAMBERS
Let all parties concerned attend before the Judge/Registrar in Chambers on the 11th day of December 2000 at 10am/pm on the hearing of an application on the part of the Plaintiffs for the following Orders:-
(1) The Defendant be restrained by an interim injunction until judgment in this action or until further order, from taking up employment in Singapore before 31 March 2001 with Yorkee Technologies Asia;
(2) The Defendant be restrained by an interim injunction until judgment in this action or until further order, from taking up any employment in Singapore before 31 March 2001 with any other competitors of the Plaintiff and/or CCA International Inc., including, but not limited to, Presaw Pte Ltd,, the Tower Group of companies and /or branches of the aforementioned companies in Singapore;
(3) The costs of this application to be fixed and paid by the Defendant to the Plaintiffs forthwith; and
(4) Such further orders or other relief as this Honourable Court deems fit.
The grounds of this application are stated in the Affidavit of Adam Low Ah Kow filed herewith.
Dated 6th day of December 2000.
Entered No. 1584 of 2000 F
This Summons is taken out by M/s Tan Peng Long & Co of 3 Shenton Way, #21-04 Shenton House, Singapore 048660, Solicitors for the Plaintiffs.
____________________________________________________________________
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