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Protecting your company from IP theft by employees

By Claire Mansell - 13 Jun 2019

Employees are said to be a business's greatest asset, but they can also be its biggest threat. With the rise of the digital workplace, it's easier than ever for departing employees to steal intellectual property and confidential information.

While it may be difficult to steal a box of merchandise from the warehouse without being caught, it can be quite easy to download an employer's confidential information from the work laptop from the comfort of home. Most employees who engage in this type of behaviour take documents or work which they have created and consider it to be "theirs". In these employees' minds, they are not taking the employer's property, but their own.

Businesses whose value lies in intangible assets such as intellectual property or a customer base are particularly vulnerable to a rogue employee misusing that information. For instance, a software company could be in serious trouble if its source code was taken to a competitor.

So, what can employers do to protect themselves? First, all employment agreements should contain comprehensive intellectual property and confidential information clauses. These clauses should be pointed out to employees at the start of their employment. However, a well drafted agreement means nothing if it is not enforced when the time comes. If an employer becomes aware that an employee or former employee has taken their intellectual property or confidential information, they may apply to the Employment Relations Authority for an order preventing the employee from using that information. These types of orders are dealt with very quickly and can provide immediate relief to an employer before it's too late.


Claire Mansell


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