You have just learned that a senior member of the company research and development team has resigned. The employee had access to important confidential information about your company’s product development, manufacturing process improvement, business strategy and other proprietary information. The departing employee did not identify his new destination, but you have no doubt that he is joining a key competitor. The company followed its standard protocol for departing key employees including to examine the employee’s electronic activity over the last 30 days. Unfortunately, the IT group discovered that the employee emailed several important reports, meeting minutes and strategy documents to his personal email account just before his departure.
After gathering this information, you scheduled a meeting of the company senior management team, including the general counsel, to review options and strategy. It is not yet clear whether the employee gave company confidential information or trade secrets to his new employer. Even though you suspect the worst, it is also too early to assess whether your company will lose market share or will suffer other harm and, if so, how much. Your team has many questions, including whether you should sue.
Whether to sue is a very complicated question, the answer to which involves many factors, legal issues and strategic business considerations. Litigation is not without risk. At a minimum, you should consider the following issues.
There likely will be many other considerations depending upon the nature of the information you suspect may be misused, your company’s relationship, if any, with the competitor, how competitive your company’s market is and so forth. Hopefully, you can resolve the dispute quickly. You may need to act swiftly, though, to reduce or to repair any harm that may be caused by the departure of a key employee who appears to have absconded with important information. Your immediate reaction might be to run to the courthouse to stop any further actual or threatened misuse of that information. That may still be the path that your company chooses. Be sure, before making that choice, that your company considers all of the potential effects of filing suit and appreciates the potential collateral consequences of doing so.