It seems like every week we hear a new story where a business owner has had a former employee either:

  1. Steal their customers;
  2. Steal their staff; or
  3. Steal their systems or other intellectual property.

In some cases, customers, staff and intellectual property have all been targeted.

While sometimes this is simply down to unscrupulous former employees the real fault and solution often lies at the feet of the employer.

Commonly, senior staff are not bound by appropriate restraints when they could quite easily have been if the employer had been on the ball. Employers who have found themselves in this position can sometimes rely on the equitable obligation of confidence implied as a matter of law. Where the employer is a company, they can often invoke the protections set out in sections 182 and 183 of the Corporations Act. However, where the employer is not a company and even quite often where it is, without a specific clause in the contract of employment, it is difficult for the employer to stop
a former employee from wreaking damage to the business after they leave.

When it comes to stealing staff, there is no implied term at common law and if you do not have a clause in your contract of employment or other agreement with your staff member restricting the right of a departed employee to approach your staff, there is usually nothing you can do about it.

Many employers also fail to protect their important intellectual property paying no regard to IT security within the business.

Sometimes the theft of intellectual property is obvious. Other times it is more difficult to detect. In these circumstances it can often pay to use a forensic IT investigator. By examining the former employee’s computer and any other devices which they used whilst they were working for you, an IT investigator with forensic skills can uncover all sorts of inappropriate conduct by a former or even existing employee, which you were completely unaware of.

The key here is not to wait until the employee you have suspicions about leaves. The IT systems and devices of your business are yours and you are entitled to examine them as and when you like and by whatever means you like subject of course to ensuring you do not breach your legal obligations such as those under the Privacy Act or the general protection provisions of the Fair Work Act.

In a recent case, after the client consulted us we arranged for a forensic IT investigator to go through the former employee’s computer and devices, such as mobile telephones, he had been using. The investigator found that the employee had downloaded to a USB drive enormous quantities of the business’ records including its financial records and had been making repeated calls to eight of the business’ most important clients for months before he left even though he was not doing any work for them. Ultimately the investigator’s evidence proved critical in successfully pursuing the former employee and putting an end to the ongoing damage.

The key lessons are: –

  1. Be very careful which employs you allow access to what records
  2. Be forever vigilant and do not assume that your employees are not looking at information and records they should not and never assume that nobody is downloading what they should not
  3. Keep an eye on the telephone records of your employees, particularly senior staff and certainly any of those you have suspicions about
  4. Ensure you have proper employment contracts by which the employee agrees to be restrained from poaching staff, stealing customers and setting out clearly that all intellectual property created on the job belongs to the business. They should also clearly set out that all records, such as emails and telephone calls, may be inspected at any time without notice; and
  5. If you have doubts or suspicions do not just cross your fingers but do something. First, call an employment lawyer so you can be sure exactly where you stand and secondly, give serious consideration to engaging a forensic IT expert to examine the records at work.