SINGAPORE – It does not pay to take business data from your company when you leave, even if you think such information can give you a boost in your new role.
You may think that doing so can help earn a fat bonus or a raise in your new job, but you risk losing even more if you are sued and are ordered to pay for your old company’s loss of profits.
As corporate deals can easily run into hundreds of thousands of dollars or even millions, this may land you a hefty bill and legal costs that could be many times more than your new salary package. And that is assuming you can still hang on to your job for dragging your new company into a legal battle.
Here are two recent examples on how the High Court assessed the damages that were related to the misuse of company data.
The country manager of a technology company was ordered to pay over $600,000 for acting against the interests of his firm while he was still employed.
About seven months before he left, the manager sent his prospective new employer a “business plan proposal” detailing customer transactions and a list of the sales achievements of key employees and their salaries, so that the competitor could poach these high performers.
He also committed other misdeeds, such as making his team members work for free for his side hustle on the pretext of conducting a team-building course. He also made unauthorised commission payments to his then employees.
The court ordered him to pay over $300,000 for disclosing company secrets in his proposal to the rival firm because it caused his former employer to lose business and good staff.
Asking staff to work on his side hustle proved costly because he was ordered to pay for their salaries for the duration of the “team-building exercise”, which came to about $38,000. He also had to refund about $90,000 in unauthorised commission and claim payments to two employees.
In addition to these sums, he and his new employer had to pay a further $430,000 for potential loss of profits as well as additional costs incurred to replace employees who were poached.
As the manager had to share half of this sum, his total bill for the various misdeeds came to about $660,000.
An employee sued his former employer for unfairly dismissing him for wanting to report an alleged wrongdoing to the authorities. In retaliation, the company also sued him for breach of confidence as he had forwarded business e-mails to his own account.
The man lost both cases because he could not prove that his termination was done wrongfully and that his taking of business information was justified.
He argued that he had forwarded the business e-mails to his personal account because he had wanted to give the information to his lawyer for his claim on the wrongful dismissal.
But High Court Judge Vinodh Coomaraswamy noted that even if an employee had a good reason to use such information to expose a wrongdoing by the employer, the proper way to do this would be to apply for a court order to compel the disclosure of the relevant e-mails.
If employees are entitled to keep such information, there would be “employment law anarchy” because “it would amount to granting a licence to every disgruntled employee to duplicate and appropriate reams of confidential information of potential relevance to the claim”, the judge said.
Although it is wrong for employees to keep business e-mails, their employers would still have to show how such acts have resulted in losses for them, since they are asking to be compensated.
In this case, the company failed to show that it had suffered any loss or damage as a result of the employee’s action. So the court ordered the employee to pay only a nominal compensation of $1,000 to his former company.
So the lesson here is that if your employer does not appreciate you even though you are talented, just leave with your head held high without taking anything. After all, you will feel more satisfied if you do well in your next job with your own capabilities.
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