Rupali Shah 08 April 2017

Possible civil actions against employee

Respected all,

During the course of employment, the manager of company started hidden competetive business in the name of his wife and diverted the customers of company. During the office working hours, he used to send emails to the customers from his personal ID to forward the business proposals of his new business. Furthermore, he stolen the data from the computers of company and also deleted the same and finally resigned. There is no non- compete agreement with said employee. What possible civil actions are available under verious laws against such employee?

Thanks in anticipation.

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12 Replies

Ritesh Maity (Labour Law Advocate) 08 April 2017

First, there is hardly any legal validity of non-compete agreement. Even if there was one, you cannot stop an employee from joining a competitor company.

Since he has resigned, and assuming that you have accepted such resignation and full and final settlement was done, then there is hardly any scope to charge him from the point of view of labour laws at this stage.

If data of company is stolen and subsequently discovered after his resignation, you may lodge a police complaint and initiate a legal proceeding.

Kumar Doab (FIN) 08 April 2017

Indian Courts have consistently been declining to enforce the Non Compete Clauses/agreements.

So ignore it.

The onus to establish Data Theft etc is on you.

The market is open for everyone and you can win back the customers.

Kumar Doab (FIN) 08 April 2017

Same Query:

https://www.lawyersclubindia.com/forum/details.asp?mod_id=148668&offset=0

Rupali Shah 08 April 2017

Kumarji,

Thanks for your reply.

Could anyone carry out competetive business during the course of employment and that too during working hours using company's infrastructure?

Rupali Shah 08 April 2017

Riteshji,

Thanks for your reply.

Employee has resigned through email and there is no full and final settlement. Criminal action initiated.

But what possible civil actions are available especially under under labour laws.

Ritesh Maity (Labour Law Advocate) 08 April 2017

Originally posted by : Rupali Shah
	Kumarji, Thanks for your reply. Could anyone carry out competetive business during the course of employment and that too during working hours using company's infrastructure?

No. If someone is carrying out any business activity during his employment, he falls under the scope of dual employement, for which you can issue him show cause, initiate domestic enquiry, prove the charges and take action accordingly.

Ritesh Maity (Labour Law Advocate) 08 April 2017

Originally posted by : Rupali Shah
	Riteshji, Thanks for your reply. Employee has resigned through email and there is no full and final settlement. Criminal action initiated. But what possible civil actions are available especially under under labour laws.

The contents of the email, appointment letters etc. along with other factual details is required.

Rupali Shah 08 April 2017

Thanks.. Thanks alot.

gaurav 08 April 2017

Hii Ritesh can you please give your valuable suggestions on this matter as well

https://www.lawyersclubindia.com/forum/Mental-harassment-by-private-company-senior-employees-148571.asp

Nitish Banka (lawyer) 09 April 2017

Solution for Data Theft

The IT firms today are playing on Big Data an they should prevent their data from data theft, from User information like E-mail Ids, passwords,credit card number or may be any other sensitive data in your system for personal use or may be for business plans are all sensitive data and unauthorized access by your employees can create business problems and may be loss of reputation.The loss of information by a person who accesses your company data is covered under Data Theft In a recent case of a call center where an employee stole the sensitive data of the customers and later they misused the data by impersonating as company employees and defrauding the customers in the name of original entity company, thereby that BPO lost all the sensitive data and reputation.

Image result for computer data theft

Here is the solution to this issue, if you have proof that your employee is stealing data you may move appropriate authority under the IT Act 2000, specifically empowered to resolve data theft issues-:

For adjudicating of the dispute under the Information Technology Act, Section 46 was enacted which has given the power for adjudication of the crimes. The power has been given to the Secretary, Information Technology and he has power to adjudge the quantum of compensation under Sections 46 and 47 of the Act.

Now Section 43 of the IT ACT is for your rescue

Penalty for damage to computer to computer, computer system etc.- If the person without permission of the owner or any other person who is in charge of a computer, computer system or computer network- (a) Accesses or secures access to such computer, computer system or computer network;

(b) Downloads, copies or extracts any data, computer date-base or information from such computer, computer system or computer network including information or data held or stored in any removable storage medium;

(c) Introduces or causes to be introduced any computer contaminant or computer virus into any computer, computer system or computer network;

(d) damages or causes to be damaged any computer, computer system or computer network, data computer data base or any other programmes residing in such computer, computer system or computer network; (e) disrupts or causes disruption of any computer, computer system or computer network;

(f) denies or causes the denial of access to any person authorized to access any computer, computer system or computer network by any means

; (g) provides any assistance to any person to facilitate access to a computer, computer system or computer network in contravention of the provisions of this Act. Rules or Regulations made hereunder;

(h) charges the services availed of by a person to the account of another person by tampering with or manipulating any computer, computer system or computer network. He shall be liable to pay damages by way of compensation not exceeding one crore rupees to the person so affected. Explanation.-For the purposes of this section-

(i)“computer contaminant” means any set of computer instructions that are designed- (ii)to modify, destroy, record, transmit data or programme residing within a computer system or computer network; by any means to usurp the normal operation of the computer, computer system or computer network; (ii) “computer data-base” means a representation of information knowledge, facts, concepts or instructions in text, image, audio, \ video that are being prepared or have been prepared or have been prepared in a formalized manner or have been produced by a computer, computer system or system or computer network and are intended for use in a computer, computer system or computer network. (iii) “Computer virus” means any computer instruction; information, data or programme that destroys, damages degrades or adversely affects the performance of a computer. (iv) “damage” means to destroy, alter, delete, add, modify or rearrange any computer resource by any means.

Now section 43 covers wide range of data thefts and also covers the amount of penalty and compensation maximum 1 crore under the act.

However under S., 61 civil remedy is barred and therefore one can take a recourse of IT act to get compensation on Data Theft.

Adv Nitish Banka

Supreme Court of India