Sharing Confidential Information. It’s a cultural thing
An employment tribunal has held that a bank involved in the LIBOR manipulation scandal wrongly and unfairly dismissed a foreign exchange trader for disclosure of confidential client information to traders from different banks in an online chat room. The tribunal found that it was insufficient for the bank to rely on a strict reading of its policies and codes of practice on protecting confidential information without properly investigating how the policies were actually applied in the foreign exchange business or the extent to which the information was already in the public domain.
A reasonable investigation would have revealed that there was a culture of information-sharing between foreign exchange traders at different banks, a fact that was highlighted by a regulatory investigation into the bank by the FCA. The inadequacy of the bank’s investigation was compounded by its failure to address the relevance of the regulatory investigation for the disciplinary process or to interview witnesses who might have corroborated the trader’s defence. The tribunal also found that the trader was not in repudiatory breach of contract. The breach of confidentiality was not deliberate as he believed his conduct was permitted, given the similar conduct of his peers and immediate managers. Further, at the time of the dismissal, he had not shared confidential information in chat rooms for three years following a specific management instruction on the use of chat rooms.
The case provides useful lessons for employers conducting disciplinary investigations and hearings for misconduct, particularly in regulated sectors where the consequences of summary dismissal on an employee’s future career prospects can be severe.
Stimpson v Citibank N.A./ET/3200437/15.