The Ex-employee Bandit


            Two weeks ago, I overhead the tail end of a strange conversation between one of our senior professionals, “Luther,” and one of our company’s best clients. The little I heard stunned me. Luther appeared to be telling our client he planned to offer a price break for the first year to a “selected few companies” that worked with his new business.

I poked my head into Luther’s office. He quickly ended the call. Once he did, I asked him about what I’d heard. He insisted I’m misunderstood his part of the conversation. He said he was talking about price breaks he’d encouraged me to institute. Since we’d had no such discussions, I placed him on immediate administrative leave.

The good news—the client called me soon afterwards to tell me about the conversation. He let me know he had no intention of leaving our company nor of working with a vendor with shoddy integrity.

The bad news—what we learned from investigating Luther’s computer. We hired a forensic computer specialist to come over as soon as possible, which was not until the evening. He showed us me how to end Luther’s computer access. He made a forensic copy of Luther’s hard drive and let me know Luther had been deleting company files and downloading and transmitting company and client files to his personal cloud storage for several weeks.

We don’t have backup copies for some of the files Luther took. Can we force him to return those files? What are our rights if he tells us he doesn’t have them? Can we require Luther to stop using what he’s taken?


You need an attorney. If you have the right policies in place, you may have a contractual right’s claim against Luther. You may also have protections under the Uniform Trade Secrets Act, Uniform Trade Secrets Act, which enables employers to file a federal claim against former employees who misappropriate trade secrets, To take advantage of remedies under this act, you need to have statute-required policies in place.

Employer protection

Employers can protect themselves against a departing employee’s trade secret misappropriation by having employees sign a policy requiring they return or delete their copies of employer-proprietary information upon termination of employment. 

For many reasons, employers need to conduct exit interviews with all departing employees. During these interviews, employers can ask departing employees to sign a form confirming that they did not take any company information and have deleted or returned any information they had on personal data storage devices or in their cloud accounts.

Employers can ask their IT professionals to monitor their employee’s e-mail traffic. Employers can use anti-deletion programs to generate a report of everything the employee deleted in the prior ninety days—including the email trail that the employer attempted to delete. Employers need to end a departing employee’s access to their company server.

If a former employee plans to launch a competing business or to work for a competitor, the employer should preserve the former employee’s computer hard drive.

Employers of remote workers should maintain an updated inventory for the information they provide the employees and require those employees to perform their work on company devices.

Finally, I once experienced a similar situation. Here’s what I found. The best clients turn away from individuals who appear to lack integrity, particularly if they have a long-standing relationship with the original business. How you and your business interact with your clients—and with your continuing employees—serves as your best protection.

(c) 2023 Lynne Curry

If you enjoyed this article, you might like our earlier article on noncompete agreements–I signed one, can I break it?

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2 thoughts on “The Ex-employee Bandit

  1. It seems shocking, but it isn’t. In fact, it’s increasingly more common: departing employee absconds with employer’s proprietary formation to set up her/his business to compete against the former employer. The employer needs policies and singed agreements about nondisclosure of employer-proprietary information in place. Theft of trade secrets and other business-sensitive information are areas with protections, but employers need to be aware of this theft problem, to have IT protections against deletion of files, and to pay attention.
    #ex-employees #theft #trade secrets #exit interviews #employer-proprietary information

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