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Privacy statement - Terms and conditions

employer responsible for ex-employee data breach

19 November 2018

In the recent case of Wm Morrison Supermarkets PLC v Various Claimants the Court of Appeal held that an employer could be held vicariously liable even where the intention of the employee committing the relevant act was to harm his employer rather than to achieve some benefit for himself or to inflict injury on a third party. The employee’s motive in committing the act is irrelevant.

Background

In July 2013, Mr Andrew Skelton was employed by Morrisons as an IT Internal Auditor. Mr Skelton received a formal verbal warning after using Morrisons’ postal facilities for a separate, private business. It seems Mr Skelton felt aggrieved by the disciplinary sanction and held a grudge against his employer.

During the course of a later audit, Mr Skelton copied payroll data of 99,998 Morrisons employees to a personal USB stick and posted the data on a file sharing website. He later sent a CD containing the data to three newspapers in the UK.

As a result of that breach, a class action was launched against Morrisons by over 5,000 employees. The employees argued that, in failing to prevent the breach, Morrisons was liable for the breaches of the Data Protection Act 1998 (‘the Act’), misuse of private information, and/or breaches of confidence. Alternatively, they argued that Morrisons was vicariously liable for Mr Skelton’s misuse of private information and/or breaches of confidence.

Decision

In the High Court, Langstaff J determined that, although Morrisons itself had not mishandled or misused the data, it was vicariously liable for the breach.

The decision was subsequently appealed to the Court of Appeal. In upholding the High Court judgment, the Court of Appeal held that;

notwithstanding that Mr Skelton had committed the Breach: (1) from a personal computer; (2) at home; and (3) outside of working hours; there was a ‘seamless and continuous sequence’ or ‘unbroken chain’ of events linking back to his employment”.

Comment

Although this case was considered under the old Data Protection Act 1998, the principles of the case would apply to any similar incidents under GDPR.

While there was probably nothing more that Morrisons could have done to prevent the data breach in this case, it is important that schools and academies have measures in place which prevent employees having the ability to access and process confidential personal data.

Within the Court of Appeal judgment, the judge appeared to be suggesting that the only other option available to employers to protect themselves against potential claims like this was to ensure that they have sufficient insurance to cover losses caused by dishonest or malicious employees.

However, it remains to be seen whether malicious breaches of GDPR would in fact be covered by insurance and further information on this point will no doubt be needed.

If you have any concerns about the way that personal data is stored within your school or academy please do not hesitate to get in touch with one of our legal team.

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ASCL Annual Conference Online

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The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

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