Company info stolen!

[aleksan]

I'm a manager in a medium sized cleaning company. We do work for hotels, kitchens, condos etc.

To cut a long story short, my director and I uncovered 2 of our ops managers stealing client information and directing some of our clients to a competitor. Apparently they've been moonlighting at one of our competitors. And getting kickbacks for referring clients over. We think we have proof of this as we've managed to get logs of their correspondence through their work emails.

The big issue is, one of them has been our ops manager for a while and as I went through his employement contract, I discovered that he does not have a non competition clause in his contract.
The more junior of the 2 has a non comp clause in his contract.

We are looking to sue for damages as some of these contracts were not small.
Will we be able to sue both of them considering the more senior manager doesn't have a non comp clause?

We will be seeking legal advice shortly but in the meantime we are obtaining more evidenceagagainst these two. What evidence will be of use in our case?

[JR8]

I'm a manager in a medium sized cleaning company. We do work for hotels, kitchens, condos etc.

To cut a long story short, my director and I uncovered 2 of our ops managers stealing client information and directing some of our clients to a competitor. Apparently they've been moonlighting at one of our competitors. And getting kickbacks for referring clients over. We think we have proof of this as we've managed to get logs of their correspondence through their work emails.

The big issue is, one of them has been our ops manager for a while and as I went through his employement contract, I discovered that he does not have a non competition clause in his contract.
The more junior of the 2 has a non comp clause in his contract.

We are looking to sue for damages as some of these contracts were not small.
Will we be able to sue both of them considering the more senior manager doesn't have a non comp clause?

We will be seeking legal advice shortly but in the meantime we are obtaining more evidenceagagainst these two. But what evidence will be of use in our case?

I'm not an expert, and not a lawyer. But the 'no compete' clause seems pivotal. In it's absence, what is to stop Employee #A knowing you have clients A/B/C on the terms that they are, and Employee #A quitting your place, and trying to lure in Clients A/B/C for his new business or employer? I see no reason.

I can see you might pursue action vs the junior one re: 'non-compete', greatly assisted by having direct evidence. What are the Grounds on which you would seek to sue the senior one?

- Like I said IANAL, just mulling over the bare facts as presented, hoping it might develop thought and further discussion.

[Beeroclock]

Well I'm much more optimistic than jr8. The behavior is a breach of fiduciary duty and confidentiality. Hopefully you at least have a confidentiality clause. Fiduciary duty is implicit in any employer-employee relation, you can't be collecting a paycheck and at the same time screwing your company over to a competitor. I'm confused about the non compete as usually that is a restricted period after termination, whereas these guys are doing this while employed, and are even still being employed at your company, correct? Evidence is a critical issue but if they've been stupid/careless enough to send client info to their personal email or even better directly to competitor, using their work email then that seems basically a smoking gun. Get proper legal advice but IMO you will have a case especially against the senior manager as he has an even greater responsibility to the company which has clearly been betrayed, if you can prove this adequately. Good luck and will be interested to hear how it goes

[sundaymorningstaple]

I wouldn't be surprised if they couldn't be charged with theft. After all, they were still working for their employer. Most non-compete clauses are normally based on trying to work for a competitor AFTER they leave their current employer. If they are still working for the current employer, they are, in fact stealing from the company and can probably be charged as such if you have got sufficient documentary proof (e.g., incriminating email traffic between the two managers and the competition and the proof of passing or deflection of business to the competition while still employed with the original employer.

I think a lawyer would be a prudent next step, if for no other reason than to get a legal perspective on it.

[Beeroclock]

Yeah there could be elements of criminal conduct such as theft or perhaps bribery, ie. if the "moonlighting" payments are considered like a bribe to get these people to act against the interest of their employer. If you are wanting to make a point of principle or simply teach these guys a serious lesson, then involving the police might be even more effective than civil law suit. But if it's purely from a business/commercial perspective then you need to sack them ASAP (after taking legal advice and collecting as much evidence as possible) and consider the best avenue to recover the damages. If there's evidence linking it directly to the other company and in particular if they have instigated this, then it might be more fruitful to take action against that company too.

Having said all this you obviously need to assess if worth the hassle or better to just cut loss and get on with business. But if it were me I'd take action out of principle and to send a message to these guys, your other staff, the competitor company, etc that this isn't on.

[taxico]

can't a no-compete document be signed at any time during the course of employment? (if the employee is willing)

[JR8]

Well I'm much more optimistic than jr8. The behavior is a breach of fiduciary duty and confidentiality.

How. Explain.

[Beeroclock]

Well I'm much more optimistic than jr8. The behavior is a breach of fiduciary duty and confidentiality.

How. Explain.

"stealing client information and directing some of our clients to a competitor. Apparently they've been moonlighting at one of our competitors. And getting kickbacks for referring clients over. We think we have proof of this as we've managed to get logs of their correspondence through their work emails. "

I thought the above is self explanatory. There is a very similar case in energy industry a few years ago here and the aggrieved party sued for breach of fiduciary duty and confidentiality in Singapore High Court.

[Beeroclock]

can't a no-compete document be signed at any time during the course of employment? (if the employee is willing)

Sure there are no universally accepted definitions but as what I'm familiar with and also per SMS comment, non compete is a restricted period after termination. This scenario here is about disloyal employees acting against their company's interest while still serving the contract. So I don't get OP's focus on the non compete clause.

[JR8]

You currently have no case. You're scrabbling around, trying to make parallels to other industries, and maybe countries.

What do you have?

Nothing. Come on, prove me wrong.

Come on, if you can't slay me flat, you haven't a candles chance in court. You know that's true.

[Beeroclock]

I never said you're wrong just I'm more optimistic than you that they have a case, and especially so against the senior manager as he has a stronger fiduciary duty than the junior. There's an actual case here in Spore so I have a basis for saying this. Anyway it's not my case to fight, will leave that to the OP, but I do stand by what I wrote here and I'd be interested to hear your explanation how you think this employee conduct can be legally acceptable.

[JR8]

It's just bollocks.

Either you have your facts and case, and all your ducks lined up, and are going to slam 'em dead. Or you're not.


You. Are not.

[sundaymorningstaple]

I reckon JR8, while not having tried deep fried turkey, may well find himself eating some crow on this one.

[JR8]

I have an opinion. But won't express it. As I know... that's not the way.

[Beeroclock]

See explanation here

http://legal.practitioner.com/regulatio ... _9_3_6.htm