Employer’s claim of theft of company secrets fails…

An employer accused a senior employee of breaching terms in his employment agreement by setting up a competing business and stealing company information to assist the competing business.

The Employment Relations Authority found that the employee had breached his employment agreement by incorporating a company of which he was a director without first obtaining written consent from his employer. However, the ERA declined to award a penalty for this breach as it caused no loss to the employer.

The ERA held that the employee had otherwise not breached his employment agreement. The employer had argued that the employee wined and dined business clients on the company credit card with the intention of diverting them to his business. The ERA found that there was no evidence that this was the purpose for the meeting, and held that the spending was a legitimate business expense.

The employer also alleged that the employee took confidential information from his business including secret information including pricing. The ERA found that the employee had not physically removed the information or copied or memorised it. The ERA held that the employee knew about the employer’s pricing structure because he was responsible for setting it. However, pricing could only be fixed for six months at a time, and any information that the employee had was now out of date.