Employee was liable for forwarding the company’s key figures

A manager in a temporary employment agency was given notice of termination after two months of employment. Shortly after the notice was given, the employee established his own temporary employment agency.

The company asked for and was granted the Bailiff’s Court's permission to examine the former employee’s private computer to preserve evidence in the case. This option to examine employees' private computers etc. is only available in cases on violation of IP rights, but not in cases on trade secrets.

The forensic examination revealed that the employee had sent numerous e-mails to his own private e-mail account, including offers, business conditions, a tender list, a standard co-operation agreement and an Excel spreadsheet with detailed information on the company’s turnovers and contribution margin on different temporary workers.

The temporary employment agency brought the case before the Maritime and Commercial Court and claimed compensation of DKK 700,000 in damages from the former employee and his new company for violating the company’s copyrights and trade secrets.

Documents were not protected by copyrights

The Maritime and Commercial Court found that the company’s documents, including insurance conditions, co-operation agreement, and tender list, appeared as standard documents. The documents did therefore not have any separate copyright protection.

Turnover figures were trade secrets

Moreover, the Court held that the company’s business conditions, the anonymized temporary workers' list, agreements and offers were not protected as trade secrets.

However, the Court found that the Excel spreadsheet with detailed information regarding the company’s turnover and contribution margin on different temporary workers did constitute trade secrets. It was therefore deemed a violation of the Danish Marketing Practices Act when the employee forwarded the information to his own private e-mail account and that his new company had used the information to start up a competing business.

The violation of the Danish Marketing Practices Act had given the manager’s new company an unfair advantage in connection to the establishment of the competing business. The court held that this advantage had inflicted a loss on the temporary employment agency. Since the company had not asserted any claim of payment of compensation for violating fair business practices, the former employee was ordered to pay a discretionary sum of DKK 25,000, as well as his new competing company which was also ordered to pay DK 25,000 in compensation.

IUNO’s opinion

Companies who suspect that employees are forwarding or using the company’s material or information shall consider the option of requesting the bailiff’s court for assistance with, without notice, getting access and opportunity to examine the employee’s private computer and e-mails. This special option for preservation of evidence demands that the company on a balance of probabilities proves that the material is protected by IP rights.

The judgment shows that these options exist, regardless of whether it later on appears that the company’s material was not protected by IP rights. If it appears that the preservation of evidence was unjust, the employee may demand compensation for losses and injury to his reputation. In this specific case, the employee had not made any such claims towards the employer.

The case also illustrates just how narrow the protection of the company’s internal relations is. IUNO recommends that companies in general consider the option to impose a non-solicitation of customers and/or non-competition clause on its employees. At the same time, companies shall carefully consider who has access to the company’s trade secrets and other sensitive information. This especially applies in connection with offboarding of employees.

[The Maritime and Commercial Court’s judgment of 19 January 2017 in case V-82-15]