August 11, 2020 Articles

When Terminated Employees Steal: Cases of Purloined Company Documents

To some degree, theft pays (or at least is not seriously sanctioned) if limited to nonprivileged material.

By Brian Rosner, Natalie A. Napierala, and Katelyn M. Sandoval
Companies should redouble their efforts to keep departing personnel from absconding with confidential documents.

Companies should redouble their efforts to keep departing personnel from absconding with confidential documents.

Credit: Feodora Chiosea

An employee is terminated, her laptop and phone seized. As she is escorted from the premises, Human Resources instructs her, in no uncertain terms, about company information: All internal company emails and other business documents belong to the company and not to her, and she is to turn over such material in her possession, which, of course, she claims to have done. Yet, when the securities fraud lawsuit is filed two months later, the allegations of corporate misconduct seem surprisingly well pleaded. Indeed, the company realizes that the complaint is replete with exact quotes from multiple company documents, some of which the fired employee was copied on and many of which are privileged.

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