Whilst a company can do everything right when it comes to their employment contracts, ensuring effective use of restrictive covenants, a disgruntled employee may still seek to damage the business. If an organisation is concerned an employee is stealing confidential information from their business, what can they do?
Stay calm
Whilst the immediate reaction might be to panic if you think an employee is stealing confidential information, the first thing to do is stay calm. Getting too many people involved and sharing too much information about initial concerns may hinder you when it comes to gathering your evidence and proving your case.
Gather evidence
If you have reason to believe an employee is stealing company information, or an employee who is about to leave is gathering confidential information in a way that is suspicious, start collecting your evidence as soon as possible. Should you need to bring a claim, you will be ready.
Involve your HR team
Whilst gathering information about the activities of an employee, you need to be certain you are not inadvertently affecting the business or causing a potential claim that the employee you are investigating could bring against you. If you don't have a dedicated HR team, speak to an employment lawyer because they will be able to guide you on the process and investigation.
Speak to the employees' line manager
If you are investigating an employee for misconduct of the theft of confidential information, their line manager must be made aware of what is going on. They may have information that could support your investigation, or they might have had concerns themselves that confidential information was being gathered.
Approach your IT team
Most company information is held on computer systems and activities are usually monitored by your IT team. If confidential information has been taken, it is likely sitting on one of these systems or there will be signs of it being moved. Your IT team is likely to be able to find data on servers by 'going in through the back door' and extracting information that can help your case without alerting the employee. They are more likely to be able to find evidence without compromising any of the data that you find. For example, should you log onto an individual's laptop using their password, they may be able to argue that any stolen data found on their laptop was put there by somebody else.
Look at print logs and phone records
Some employees think they are being clever by printing off confidential information, such as client lists or pricing data, rather than storing it digitally or emailing copies to themselves. Hopefully, your systems will enable you to see what they have printed and your IT teams can gather this information for you securely.
Phone records may indicate that an employee has been contacting clients they would not usually contact. This should set off alarm bells as it may suggest they are trying to steal clients, which is likely to break their restrictive covenants.
Speak to your clients and colleagues
If you have concerns that an employee has contacted a client they should not be in contact with, you might want to speak with that client. If you take this route, it is important not to alert your contact of the investigation taking place, so tread carefully. Similarly, if you choose to involve other employees by speaking to them about potential concerns, you must do so on the basis that they will keep quiet and ensure you do not share any unnecessary information.
What to do if you think an employee is stealing confidential information
The first step a company should take when they suspect an employee is in breach of restrictive covenants and, potentially, taking confidential information is to issue a cease and desist letter. This letter tells an employee that you know what they are doing, you have evidence that they have breached the terms of their contract and they must stop immediately. The employee must sign undertakings to confirm that they will stop and return any stolen confidential information.
What to do if someone ignores a cease and desist letter
There are a variety of reasons why an employee may ignore a cease and desist letter. It could be that they are scared, or they do not know what to do. It could also be that they are being backed by a new employer who is inducing their breach of covenant in order to obtain confidential information about your business.
If you have fundamental concerns over an employee not signing the undertaking, you may consider an injunction. Getting an injunction essentially means you are turning to the Court for help as the matter cannot be resolved internally, so you require them to put an order in place to stop the activity from continuing. Injunctions are usually reserved for extremely severe cases as they are costly and must be acted upon quickly. Injunctions are an interim measure that sit in place pending a trial. Once at trial, the Court will decide whether you are right or wrong to bring the claim against your employee for breach of covenants and theft of confidential information. The Court will then issue a final injunction, protecting your position moving forwards.
If the breach is less severe, for example, it does not risk the entirety of the business and you do not have concerns the employee will cause significant damage if they do not stop their activities immediately, you may wish to issue Court proceedings in the ordinary way. This route seeks damages for the potential loss of profits as a result of the breach or, alternatively, damages for loss of reputation.
Conclusion
- Stay calm
- Act quickly
- Assemble your team, which might include a combination of internal and external advisors
- Start to gather information as soon as you suspect a breach has taken place
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
