Employee Data Theft – What are your legal remedies?

Written by on February 27, 2023 in Employment Law Blog, Employment Law Issues
Employee Data Theft

Every business owns certain information that is private or proprietary. This includes employee information, financial records, trade secrets, and client contacts. Since much, if not all, of this information is digital, it can be challenging to protect it from employees intent on stealing it for their use or causing harm to the company.

To protect their sensitive data, many companies will go to considerable lengths. They will hire security firms and put any number of data protection technologies in place. And while these measures can do a reasonably good job of protecting against outside threats, employees can often steal data relatively easily using just their email account, a USB stick, or even a phone with a good camera.

Despite the challenges, there are still things employers can do to protect their confidential information from being stolen by employees.

How can you prevent employee data theft?

Some of the measures that employers can take to prevent employee data theft include the following:

  • Include a confidentiality clause in employment contracts
  • Provide all employees with company-owned mobile phones and laptops
  • Implement an Acceptable Use Policy (AUP) which outlines how employees may use company-owned technology, clearly stating that no personal usage is permitted
  • Have employees acknowledge that they have read and understand the AUP
  • Employees should acknowledge that they do not have a reasonable expectation of privacy when accessing data using company resources and that the employer will monitor usage
  • Stringently enforce the AUP by monitoring usage and disciplining employees when necessary

What can you do if an employee steals data from your company?

If you suspect that you have an employee stealing data, it is essential to seek legal advice as soon as possible. An employment lawyer will be able to advise you on how to protect your data and on the steps to take to hold the employee accountable.

For example, you may be able to hire a computer forensic investigator who can try to recover an employee’s hard drive and trace email activity and browser history to discover precisely what data was stolen. If the employee is still with your company, you may be required to launch a formal investigation. And suppose the investigation suggests that the employee did, in fact, steal information. In that case, you may need to immediately terminate the employee, sending a letter demanding that the data be returned, or possibly even commencing a civil claim.

What legal remedies do you have against employee data theft?

Employees with a fiduciary duty toward the company, such as those at the executive level or senior management, must act in the company’s best interests and, therefore, not engage in self-serving behaviour such as stealing data or selling it to competitors.

If they engage in this behaviour, the employer can sue for breach of their fiduciary duty.

For lower occupational employees who do not have a fiduciary duty to the company, they may be bound by a duty of confidentiality especially if it is included in their employment contract and the employer may then sue for breach of contract if the employee steals data.

In these civil suits, the employer may seek the following:

  • Monetary damages
  • The stolen data be returned
  • Profits that the employee made by selling or using their data
  • An order restraining solicitation of customers, inducements of employees and competition
  • An order restraining disclosure of confidential information

Further, the employer could seek an injunction or Court order that prevents the employee from using the data for their interests and to preserve and or seize the employee’s computer hard drive.

Contact Minken Employment Lawyers today!

If you believe an employee has stolen data from your company, there is no time to lose. Contact us today to speak to an experienced employment lawyer who can advise you on the steps to help prevent further harm to your business. We can be reached at: 905-477-7011 | Toll-Free: 1-866-477-7011 | contact@minken.com.

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Please note that this article is for informational purposes only and does not constitute legal advice.

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