Theft Of Data By Employees: POPIA, IP, And Competition Law Implications

• Published date: 08 November 2021
• Subject Matter: Anti-trust/Competition Law, Employment and HR, Intellectual Property, Privacy, Antitrust, EU Competition , Contract of Employment, Data Protection, Copyright
• Law Firm: ENSafrica
• Author: Mr André Maré, Era Gunning and Nicole Gabryk

Employees stealing personal information and other sensitive data from their employers can be a serious problem. The theft of confidential company information has been on the rise since the start of the global coronavirus pandemic, where the move to the digital world and working from home have resulted in less stringent safeguards to protect information than would otherwise exist in the office. A recent report by cybersecurity software company Code42, found that when workers walk away from their jobs they're increasingly bringing home sensitive company data, and found that there was a 40% increase in "data exposure events" between the first half of 2020 and the first half of 2021. Facebook was recently thrust into the spotlight when ex-employee Frances Haugen leaked vast amounts of damning internal research to the US authorities and the press, detailing how Facebook knew its sites were potentially harmful to young people's mental health. While the motive may arguably be admirable in this in this context, it does raise a broader question: what can employers and other affected parties do when their sensitive information is leaked, stolen, or otherwise compromised? Well, like with all legal questions, the answer depends on the facts and circumstances.

crime of theft

When an employee steals information, the obvious answer may be to lay a charge of theft. However, it is not as simple as this. Theft requires an intention to permanently deprive an owner of their property, in this case, information. If an employee were to steal physical documents, or a hard drive, this would be sufficient to sustain a charge of theft, as confirmed in the case of Rex v Cheeseborough, where two former employees of the complainant firm stole two documents belonging to the complainant company and then joined a new firm, a competitor with the complainant firm. Where an employee copies the information and later distributes those copies, the employer has not been permanently deprived of their property. Although an argument could be made that the copies are also the property of the employer, and as such theft of such copies is still theft as the employer has been permanently deprived of those specific copies, it is likely more advisable to pursue a copyright claim against the wrongdoers where there has been unlawful copying of information.

copyright infringement

A copyright infringement can have both civil and, in limited circumstances, criminal consequences. In terms of the Copyright Act, 1978, an employer would be able to pursue a civil claim for copyright infringement against an employee that unlawfully copies information protected by copyright where the employer is the owner of such copyright. This position is protected in statute under the Copyright Act with ownership generally determined by the type of work involved, while employers are also strongly advised to include terms to this effect in employment agreements, thus removing any doubt whatsoever...