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HT for Small Biz - Newsletter

Company Awarded $50,000 Damages - Employee Breached Copyright

A software engineer employee breached his employment contract, his equitable duty of confidence, the copyright act and the corporations act when he downloaded more than 390,000 of his employer’s files onto a hard drive just before his resignation.

The employee worked for a mining industry software supplier and had intended to resign and move on to work for his company’s competitor.

The day before his resignation the employee downloaded and copied over a period of seven hours roughly 60 gigabytes of company data. The company claimed that contained within the data was “the heart of the business” and leaks of such company information would cause “unrecoverable damage”.

The employee admitted to the level of significance the data held to the company’s success but withheld that he had only intended to copy the data onto his hard drive as a matter of keeping a “trophy” for his work and not to benefit himself or the company’s competitor.

Justice Berna Collier said that “the deliberate and sustained period of time the employee took to copy the files onto his own device, remove them from company premises, falsely state that he had returned all property of the company and review them at his leisure for his own purpose cannot be ignored. The employee is in breach of both company and federal legislation and as such the $50,000 in damages is justified”.

Confidentiality agreements and access to company files and property policies require careful consideration when being composed for inclusion within employee handbooks and agreements. Had the company’s policies been somewhat vague, easily misinterpreted or simply non-existent, it may have suffered the fate of having vital company information shared with competitors that could sink its business.

If you require review or the creation of confidentiality or company intellectual property policies for your business, please feel free to contact us on (02) 8882 9694

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