Yahoo Finance Increase in disgruntled employees stealing confidential customer data
The number of High Court cases involving employees stealing confidential data has increased by 25pc in a year, according to new figures.
While the number of cases is still relatively small, up from 40 in 2015 to 50 in 2016, says EMW, the commercial law firm, the figure is rising rapidly as data theft becomes easier to carry out.
Employees today have easier access to confidential data remotely via a range of devices such as smartphones and online cloud storage platforms, making them feel more confident about taking confidential data without arousing suspicion, EMW said.
Increasing staff turnover and subsequent resentment among employees is another factor driving the growth of data theft.
Employees may take confidential data such as client databases or key financial information with them when they leave in order to give a competitive advantage to their new employer or a new company they are setting up.
Businesses most at risk are those in the technology or financial services sectors, where staff members can steal proprietary algorithms, as well as those that are heavily reliant on client relationships such as recruitment or estate agents.
One recent High Court case involved an investment management business which won against two former employees who had copied and retained files in breach of their contracts of employment.
Felix Dodd, senior solicitor at EMW, said: “Data is becoming more and more business-critical – and easier and easier for staff to siphon off when they move on.”
“Theft of confidential data has become such a widespread concern for firms in the City that many of them ban their employees from sending work emails to their personal accounts, and some now even disable some functions on their employees’ smartphones.”
While the number of employee data theft cases is on the up, last year's figure is a long way off 2009's, when there were 95 High Court cases relating to the theft of confidential information.
At the time, EMW said that redundancies and the fall in bonuses during the recession had “prompted some disgruntled employees to steal their employers’ valuable data, such as client lists, in order to set up their own rival businesses or facilitate their move to other employers”.
Because the High Court is civil rather than criminal, employees found guilty of data theft will not be given a criminal record but may face substantial costs and a possible injunction to stop the use of the data and to have it returned.
