Telecommunications, Media And Technology (TMT) Law Update – Volume 49

Judgments

IT security company liable for confidentiality breaches by new employees

On 21 October 2022, the Australian Capital Territory Court of Appeal dismissed an appeal against a trial judge's findings that an IT security company was entitled to an account of profits together with equitable compensation and declaratory relief against a company to which confidential information had been transferred by three departing employees: Dreamtime Supply Company Pty Ltd v Steadfast ICT Security Pty Ltd (No 2) [2022] ACTCA 57. The primary judge had found that the departing employees were involved in conduct that breached their employee and director fiduciary, contractual and statutory obligations and that the new employer, Dreamtime, was knowingly involved in the conduct of the other defendants. The primary judge held that the conduct of one of the employees, in particular, was "thoroughly dishonest and in flagrant breach of his obligations to his employer".