Impact of e-Discovery on the CIO

27 February 2009 Internet, IT & e-Discovery Blog Blog
Authors: Peter Vogel

A recent report by the Ponemon Institute commissioned by Symantec found that nearly 60 percent of departing employees steal company data. Given the amount of information that is electronic it’s not much of a surprise since it is so easy to take data which may be attached to an email, copied to a laptop, loaded to a thumb drive, or copied to a CD. When the departing employee leaves of their own accord, they can plan to take valuable information and may be able to hide their tracks. Often times departing employees want to help their new employers, or so they think, however this can be disastrous to the new employer. This is particularly true when they are unaware that their new employee brought confidential information from a previous job.

Litigation Abounds

Often stealing company information leads to the lawsuits of theft of trade secrets that on the surface appear to be labor and employment disputes. As a result the IT department does not always get involved early enough to help avoid legal problems in discovery.

Real Example

A few years ago a former employer sued three former employees claiming that they stole trade secrets. The former employer also alleged that one of the former employees wiped his laptop clean before departing which destroyed emails, spreadsheets, and documents which contain confidential information. Based on the representation to the judge, a Temporary Restraining Order was issued against the three former employees to preclude them from using any former employer trade secrets.

Deposition of the CIO

During discovery the former employer’s CIO was deposed, and apparently not aware of what allegations that were made in the court pleadings. So the CIO testified that the day the former employee departed that he took possession of the laptop that had been purportedly wiped clean. That same day the CIO fired up the laptop and testified that there were thousands of emails, spreadsheets, and documents which he copied to his server. Then he turned the laptop over to his staff who “scrubbed” the disk, whatever that meant...and he really did not know. He got the laptop back from his staff a few months later. There was no log or chain of custody documentation regarding the laptop. At the temporary injunction hearing the former employer’s attorney did not know how to defend a claim of spoliation and as a result never got an injunction and the case soon settled.

Lesson

Before filing a lawsuit the CIO and lawyers should have had a discussion about the evidence concerning the laptop and electronic evidence, and even though the suit was filed it would have been prudent for the lawyers to have properly prepared the CIO for his deposition. Not knowing the claims proved to be a disaster on many levels.
 

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