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The importance of thorough investigations highlighted in Stimpson v Citibank

In the case of Stimpson v Citibank N.A ET/3200437/15 an employment tribunal held that a foreign exchange trader who had been dismissed by a bank for disclosing confidential client information to traders from different banks through an online chat room had been unfairly and wrongfully dismissed.

Mr Stimpson was employed by Citibank as a trader from January 1989. During his appraisals in 2009 and 2010 he had been encouraged by his manager to join an online chat room in order to get better market information, however he was not given any specific guidance on what should be posted in the chat room. Citibank’s Code of Conduct and handbook provided some guidance to employees on handling confidential information. In 2013 and 2014 Citibank commenced reviews and investigation into its foreign exchange business as well as an independent regulatory investigation being undertaken by the Financial Conduct Authority. Mr Stimpson was suspended in March 2014 pending attendance to a formal hearing to address allegations that on 12 occasions between February 2010 and August 2011, he had inappropriately shared client confidential information with traders at other banks on chat rooms and this conduct had amounted to a breach of the implied duty of fidelity and specific Company policies. He was dismissed in November 2014.

  • Misconduct dismissal: In order for a tribunal to decide whether an employer has had a fair reason for dismissal, the tribunal should consider whether the employer has acted reasonably in all the circumstances in treating it as a sufficient reason for dismissing the employee. In order to have reasonable grounds for believing that an employee is guilty of misconduct, an employer must conduct an appropriate level of investigation, within the range of reasonable responses available to a reasonable employer.
  • Wrongful dismissal: Dismissing an employee without notice may be justified where an employee has been shown to have committed a repudiatory breach of the contract (i.e. a breach that gives the aggrieved party the right to choose to either end the contract or to affirm it). The conduct must so undermine the trust and confidence fundamental in the contract of employment that the employer would no longer be required to retain the employee.
  • Foreign exchange market investigations: Financial regulators investigated concerns that financial institutions had behaved in a manner that was inappropriate in foreign exchange trading. Citibank was investigated by the Financial Conduct Authority which led to the circumstances of this case coming to the attention of Citibank.

The employment tribunal found that the summary dismissal of Mr Stimpson for disclosure of confidential information was wrongful and unfair as Citibank had a culture of information-sharing. 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 as had been highlighted by the regulatory investigation.
  • Citibank had failed to address the relevance of the regulatory investigation for the purposes of the disciplinary process and had also failed to interview witnesses who might have corroborated the Mr Stimpson’s defence. This contributed to showing that the investigation conducted had been inadequate.
  • Mr Stimpson was not in repudiatory breach of his contract. His breach of confidentiality was not deliberate as he believed his conduct was permitted. A belief that had been strengthened by his peers and managers conducting similar activities. Also, he had not shared confidential information for three years prior to the dismissal following on from specific management instruction on the use of chat rooms.

This case provides useful lessons for employers conducting disciplinary investigations and hearings for misconduct.

Employers should be mindful that they cannot rely on strict rules in policies if in practise they are not actually applied and enforced by the Company. The fact that the management at Citibank appeared to condone the information-sharing with foreign exchange traders from other banks by being aware of and conducting similar activity themselves, meant that it was unreasonable for Citibank to rely on a breach of their strict rules which protected clients’ confidential information as grounds for dismissing Mr Stimpson following on from his disclosures on chat rooms.

Employers should also ensure that all investigations are conducted thoroughly and adequately. Citibank had failed to use the evidence of the financial regulator’s investigation during the disciplinary process and this evidence was directly relevant to the reason for Mr Stimpson’s dismissal. When considering what was fair, the tribunal took into account not only what the dismissing officer knew when reaching his decision, but also what he reasonably should have known had there been a reasonable investigation.




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