What action can be taken against ex employee using data of company


One day, my manager & 15 other worker suddenly resigned & set up a competing business. They already registered a new company, found investor & purchased required machine. They used to regularly signin & then go to their newly bought office to set up things. All this while still being our employees. They were permanent employees, but no contract signed with them. They had been planning this from last 6 months, we recovered search history on our computers, showed searches for -Information for setting up company, registration process, cost of machines etc We believe our internal documents such as balance sheets & finance information was emailed out to their personal emails, as we found our Gmail "Trash" had been cleared. They have attempted to solicit our clients. They have been spreading rumours in the market. We found mistakes in our record books relating to stock & other components for the past few months which seems done on purpose. Should we try legal action, do we have a strong case?

Answers (2)


326 votes

As you didn't have a written agreement with them, yours is a very weak case against them. Still, if you have evidences to back your allegations then you may approach police for an offence u/s 405, 406 of IPC for criminal breach of trust.


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97 votes

This is my response to you:
1. Did you make them sign a NDA (Non-Disclosure Agreement)?
2. If yes then they are legally bound by its terms and could be heavily penalised for the same;
3. Take legal action against them by starting an internal inquiry;
4. Collect all evidences, frame the charges, give them a chance to be heard and pass orders against them;
5. Next step you can file a complaint against them to the nearest police station for various criminal offences;
6. Method of last resort is to approach court and get a stay order against them from continuing their business.

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