From Lexology, Robert O. Sheridan and Shaniqua L. Singleton discuss a recent case in which a client list that an employee remembered constituted “confidential information” and was protected by the terms of an employment agreement. Robert and Shaniqua write:
The defendant, a financial consultant at Fidelity Brokerage Services (“Fidelity”), signed an employment agreement in 2016 that prohibited him from using any confidential information belonging to Fidelity to directly or indirectly solicit customers to divert their business from or otherwise cease their relationship with Fidelity. In his time with Fidelity, the defendant serviced approximately 500 clients. The vast majority of these clients were not developed by the defendant, but came to him through reassignments or referrals from other consultants employed by the company.
In 2018, the defendant resigned from the company to join a competitor. Immediately upon arriving at the competitor company, the defendant created a list of his former clients from memory and shared the list with his colleagues, who proceeded to contact each client and notify them that the defendant left the plaintiff company. In some instances, the defendant used his contact with former clients to expound on the reasons he left Fidelity and the benefits he perceived in working with the competitor company.
In response to a motion for preliminary injunction filed by Fidelity, the defendant argued that the information he retained in his memory regarding the identity of his former clients did not constitute “confidential information” governed by his employment agreement. Judge Brian A. Davis, sitting in the Superior Court of Massachusetts’ Business Litigation Session, disagreed. In granting Fidelity’s motion, Judge Davis held that “[i]f the identity of Fidelity’s clients constitutes ‘Confidential Information’ when the information is embodied in written form, such as a customer list, it remains confidential when it resides in the memory of a former employee.” “The manner in which confidential information is retained by a former employees does not affect whether the information itself is, in fact, confidential.”