Does an employee have to inform a new employer of litigation with an old employer?

The question has often been asked whether an employee has to inform their new employer about any claims they are against their previous employer.

Both the employment tribunal and the employment appeal tribunal (EAT) had an opportunity to consider this point recently.

Ms B worked for Deutsche Bank. She brought claims of sex discrimination and equal pay and resigned.  She then found a new job with Commerz Bank.  During the recruitment process she was asked why she had left her old employer and she said that she wanted to work in a smaller team, she had lost trust in the management and had not been fairly rewarded.  However, she failed to mention that she had commenced discrimination proceedings.  She also filled in a pre-employment questionnaire which included a “fitness and propriety” section required for FSA compliance, where one of the questions was whether she had ever been the subject of civil proceedings in the UK, to which she replied “no”.

Shortly after her new employment commenced, an article was published in the press about her litigation.  Commerzbank challenged Ms B as to why she had not disclosed the litigation on her application form, saying that her failure to do so had risked Commerzbank’s reputation.  She was referred to the staff handbook, which stated that employees must inform the bank of matters which might impair their ability to perform duties or that might adversely affect the bank’s reputation.

The bank then dismissed Ms B.  It said that she had been selective with the truth, was dishonest and could not be trusted, and that she should have disclosed the litigation in order that they could have made an informed decision about hiring her.  Ms B said that the litigation was personal and irrelevant to the professional aspects of her job, that she had never been untruthful and had not known the article in the newspaper would be published.

She made claims against Commerzbank for victimisation on the grounds that she had brought discrimination proceedings against her previous employer.  Both the employment tribunal and the EAT upheld her claim.  In a nutshell, the tribunal felt that Commerzbank had reacted in a knee-jerk way to the information coming to light and had not analysed whether it was right to conclude that there had been a breakdown of trust and confidence.  It found that the decision to dismiss Ms B had been emotionally driven rather than analytically reached and that it was the discriminatory nature of the litigation that caused Commerz Bank problems, rather than Ms B being a litigious “trouble maker”.

This case illustrates that employers who discover that an employee is involved in litigation with their ex-employer will need to proceed carefully.