Employment & Service

How can I as an employer protect confidential company data from being stolen by an employee?

I am the owner of a product design consulting firm. We offer our services to various clients which in some cases belong to the same sector and are competitors. But at the same time, I am at the risk of data theft or leakage of confidential company or client information from my employees/ designers. What should I do to protect data theft in my company so that I can also build trust with my clients?

Expert Advice


With increasing digitization of data and information, it has become much easier for an employee to steal confidential data or trade secrets to earn extra money from other businesses in exchange for insider information.

The Indian law provides for data theft punishments under various sections of the Information Technology Act, 2000 (IT Act), Indian Penal Code, 1860 (IPC) and the Copyright Act, 1957.

You can always take legal action against such employees but it is better to have preventive measures in place to avoid data theft by your employees.

 To do this, you must ensure the following legal practices:

1)       Have employees sign a Non-Disclosure Agreements (NDA) as per your (employers’) terms and conditions of working in your company and confidentiality requirements for the job role offered.

2)     Have appropriate clauses in your employment contracts about the actions that will be taken against the employee in case there is suspicion or evidence of stealing company information and/ or sharing it with other parties outside the company.

3)     Non-Compete Agreement: This type of contract should clearly specify that an employee cannot join any other competitors or any other similar company which can take advantage of your business secrets and potentially be jeopardising your competitive advantage.

 

You can read more in our guide about data theft.

If you need any assistance in drafting fool-proof employee agreements or any other legal matter, request call back from a legal expert or you can check our other services.

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DISCLAIMER: The guidance provided above by the lawyers is based solely on the limited information made available to them by the respective querist. These answers are general guidelines and not specific legal advice or legal opinion. All answers are made in individual capacity and do not reflect the opinions of any employer or organisation. Kindly refer to MyLegalWork's Terms & Conditions of use.

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