KEY POINTS:
The company suspected it had a problem when a senior manager resigned and refused point blank to reveal his future plans.
It knew it had a problem when it called in a forensic computer specialist.
He found that just before handing in his notice, the manager downloaded a
huge volume of material to his company-issued laptop.
The data - confidential business, strategy and financial information - wasn't on the laptop when it was handed back, but there were traces it had been transferred to a USB key.
After an unsuccessful exchange of lawyer's letters, the company went to the Employment Relations Authority seeking an order for the return of the company's property, including the USB key.
The key was returned with all the data wiped, but forensic examination indicated the material on it had been downloaded to yet another device.
Eventually the former employee's home computer was seized by the court.
That had been wiped too, but a forensic examiner tracked data to a printer and to the wife's laptop.
It eventually came out the man had quit to join a start-up going into direct competition with his former employer.
The matter was eventually resolved, at great cost, with an order from the Employment Relations Authority stopping the former employee using any of the company's information or from working in competition for six months.
Anthony Drake, an employment specialist and senior associate at law firm Bell Gully, says it's an extreme case of what is far too common - the employee walking out the door with company data.
"In this particular circumstance, he was determined to hang on to it," Drake says.
"Some of what he was taking might not have looked like it had value, but to a company starting up, a fax cover sheet or a basic contract for supply of services has value."
That's on top of customer lists and documents relating to company strategy - the sort of thing anyone staying in the same business would love to retain access to.
"Employers need to ensure they have the necessary safeguards and systems in place to protect their information," Drake says.
"There are basic things that can be done, like not allowing employees to download information without going to the IT department. A lot of companies give staff full access to the system, even if they are logging in at home.
"If staff take laptops home, companies can disable the USB ports, so they can keep some control on what goes off the computer."
Network management tools can give alerts when use patterns change, such as large amounts of data being downloaded.
People do move around a lot more between jobs than they did in the past, but organisations will still try to limit the information which can leak out in the process.
"Employers should consider, as part of the exit interview, [basic] checks on computers," Drake says.
"They can go back the previous three months and see if an unusual amount of information has gone out. It's a simple exercise forensic computer people can do for a small cost."
Obligations of loyalty and confidentiality are clearly understood in the common law around employment.
That means employers can claim some protection of confidential information even after an employee has left, and without a written agreement requiring confidentiality.
This applies especially to what are considered trade secrets.
The legal test is whether disclosure of the information to a competitor will cause real harm to an employer.
Amendments to the Crimes Act in 2003 widened the definition of documents to include electronic information, and making it a crime to hack into computer systems for dishonest purposes or to damage or interfere with computer systems.
Drake says a surprisingly large number of computer cases are starting to come before the courts, indicating the size of the risk to employers.
Businesses can lose competitive advantage if an employee takes confidential information to a competitor, poaches customers or lures former workmates into a new firm.
