Disloyal worker downloaded database

Posted: 7th August 2013

Data stickA businessman was left to regret the trust he had placed in a long-standing employee and wishing that he had done more to protect his commercial data after the disloyal worker loaded his stationery company’s entire Sage accounting database onto a memory stick on the day of his departure to set up a rival business.

The employee had worked for the company for 15 years before resigning and taking the memory stick with him, later downloading its contents onto a laptop. The day after his employment contract ended he began working for a rival firm that he had been instrumental in establishing.

The Sage data on the memory stick constituted a comprehensive picture of all the business done by the company over a number of years. Individual invoices could be viewed, giving details of exactly what had been bought by customers and the prices that they had paid. That information, as well as email strings giving details of emerging business opportunities, was of obvious value to the new competitor.

Following the employee’s departure, the company had sought and obtained an order requiring him to deliver up the laptop for inspection by an independent forensic specialist. However, by the time the computer was handed back, an attempt had been made to delete the relevant content which had to be reconstituted by experts at significant expense.

Despite his denials, the Patents County Court found that the ex-employee had made use of the company’s confidential information. In assessing his evidence, the Court noted: “He evidently had a different idea of his duties of good faith from that which an employee of ordinary honesty would have.”

Noting that the ex-employee could not be said to have been ‘on a frolic of his own’, the Court found his new employers jointly liable for the information’s misuse. In the absence of agreement in the light of the Court’s ruling, the assessment of damages and costs due to the company will proceed to a further hearing.