How Can I Legally Stop an Ex-Employee from Sharing Company Data Without an NDA?

Hi Seniors,

I need some help. One of my employees has resigned recently. He has company data on his laptop, and I think there is a threat to the company's data. He is threatening that he will delete the data or share it publicly. Can you please let me know if there is any way to stop him using legal terms and conditions? Initially, we didn't take any Non-Disclosure Agreement from him.

If possible, could you please share a powerful NDA so that we can prevent this action?

Thanks,
Vikas

Handling Company Data on Employee Laptops

Company data is stored on the employee's laptop. However, to whom does this laptop belong, the company or the employee? If the laptop belongs to the company, then seize it from the employee, back up the data, and then delete it.

Even if the laptop belongs to the employee, the company data is still the company's asset. Instruct the employee to hand over these assets to the company and allow them to keep their laptop.

If the employee has already resigned, there is no need to obtain a Non-Disclosure Agreement (NDA) at this stage. This employee poses a threat to the company; therefore, handle this case with care. Inform the employee that the company's soft data is its property, and any act of destruction, whether partial or full, constitutes misconduct under the provisions of the Indian Standing Orders Act. Tampering with or destroying the company's assets could lead to a police complaint being filed against the employee, who would be responsible for the consequences. It is the employee, rather than the company, who could jeopardize their career if the matter escalates to the police or court.

Thanks,

Dinesh Divekar

Yes, taking the help of the police and getting him arrested or at least using the threat of arrest may be a good idea. However, it is a good idea for you to discuss the matter with your managing director or CEO and take his help in coming to a decision. His actions are illegal under the relevant sections of the Indian Penal Code. I think seeking advice from a good criminal lawyer would be advisable.

Assessing the Situation Before Taking Action

Before threatening the employee, please take stock of the situation and see what data and information he possesses. I am sure you must have already done this. If you are certain that the data will harm the interests of the company, then you must ensure that the data does not pertain to any activity labeled under the law of the land as illegal.

Legal Considerations and Actions

If it is illegal, you can't do anything; not even a Non-Disclosure Agreement (NDA) will be able to stop him. If he was allowed to use his own laptop, you can't do much in the matter by way of legal recourse. You can send a legal notice under cybercrime laws to prevent the data from being made public.

Communication and Verification

Before going legal, you can ask him explicitly through an email if he has the following data, mentioning the details of the data you presume to be in his possession.

Termination of Employer-Employee Relationship

Since the employee has resigned and assuming that his resignation has been accepted, and he is being relieved from service, the employer-employee relationship thus comes to an end. Hence, at this juncture, it is of no use to get an NDA signed nor to bring charges against him under any standing order (from the point of view of labor law).

Options for Addressing Data Concerns

The best option is to amicably settle the matter with the ex-employee if the data is so important. Otherwise, you may hire a criminal lawyer and bring charges against him provided that you can establish the charges that he has taken the asset of the company (data) on his personal laptop without any authority. Make sure that this action may agitate the employee further, and he may make this data available to the public, which may harm the reputation of the company.

Considerations for Management

I do not know the exact content of the data and how it can harm/affect the company if it is shared or made public. It is better for the management to calculate the pros and cons of their actions in consultation with a criminal lawyer.

Dear friend, these are my supplementary comments. I am writing this post as an afterthought.

Understanding the Employee's Threat

When the employee goes to the extent of threatening the management with the destruction of the soft data, we also need to check what the provocation was. Why have things come to such a pass? Was he threatened by his manager? Has he retaliated to a threat by indicating the collateral damage he can inflict on the company? What were the relations between the manager and this employee? Was the manager or someone else harassing him for a long time, and now, at the time of leaving the company, he wanted to take revenge?

Possible Causes of the Threat

When an employee gives this kind of threat, it could be inferred that either he has been driven to the wall or he has gone mad. I suspect the former cause over the latter.

Thanks,

Dinesh Divekar

Hi Vikas, I second the comments of Mr. Dinesh. In your statement, you have mentioned that he is threatening to delete or make it available to the public. Have you recorded the conversation? This could be strong evidence for the management side if approached legally. If not, try to do so. Usually, in the appointment order, there will be a clause on "Confidentiality" which holds good. Check for the same.

If it's an official laptop, then you can retrieve the deleted data from the server; your IT team can help with this. If it's a personal laptop, I'm not sure.

Cheers,
Calyan

Oh, peculiar situation... foolish act by your employee. It's quite unbelievable crucial information kept with an unreliable employee - some secrecy. I think something went wrong. OK, it's none of our business. Our advice is to immediately approach the cybercrime police in this case. You can get immediate relief in a blackmail case. All the best, take enough care before recruitment for key posts.