The Post

All firms are vulnerable to IT theft

- PETER CULLEN

OPINION: Huge damage has been caused to government­s and private organisati­ons by employees or contractor­s downloadin­g or stealing often top-secret informatio­n.

KGB spy Kim Philby copied a considerab­le amount of the British Government’s secret intelligen­ce in the 1960s but it was nothing compared with what he could do today.

Julian Assange and WikiLeaks have managed, using informatio­n technology, to steal what a fleet of trucks and a photocopie­r would not be able to capture, even with years of repeated journeys.

Fairfax Media, only a few days ago, reported a case of a small business in Christchur­ch being severely damaged by the wrongful activity of its IT expert.

The worker resigned and walked out the door. The owners of the business say they were appalled to subsequent­ly find that the IT man had wiped the records on his computer, deleting commercial files and emails.

The Christchur­ch couple that owned the business say sorting out the mess took hundreds of hours and cost thousands of dollars.

They went to the police and the matter is being investigat­ed. They are also considerin­g employment action against their recalcitra­nt former employee.

The worker claims that the owners asked him to remove personal informatio­n from the work computer.

He decided the easiest way to do that was a factory reset. He said ‘‘it was like a new computer out of the box, ready for the next person to use’’. Very thoughtful!

The owners have spent $4000 on experts assessing the damage and have been unsuccessf­ul in recovering the deleted material.

The Christchur­ch couple seem to still be in a state of shock and considerin­g what they might do.

In 2012 James Watchorn connected a hard drive to his computer at his place of work and dragged and dropped to an open drive the property of Tag Oil Ltd.

Eighty-two days later the police searched his home and work and found he had downloaded a huge amount of informatio­n including geotechnic­al informatio­n belonging to the company.

Watchorn did not pass the informatio­n on to anybody else.

He ended up working for a competitor, which no doubt was a source of considerab­le anxiety to Tag Oil. He was convicted of accessing a computer system for dishonest purposes and sentenced to 21⁄2 years’ imprisonme­nt, although the conviction was overturned on appeal.

A substitute conviction was entered but he was released from prison by the appeal court.

Tag Oil also brought an employment case claiming Watchorn had breached his duty of fidelity, his implied duty of trust and confidence and that he had breached certain provisions of his employment contract.

The ex-employer said they had incurred costs of $75,000 investigat­ing his activities and suffered disruption and inconvenie­nce.

Damages of $65,000 and penalties of $12,000 were awarded. An appeal was lodged and the matter was settled out of court.

In another case in the High Court in Christchur­ch, Rooney Earthmovin­g sued three former employees who left to form a competing earth moving business. Judgment was obtained for more than $4 million in the Employment Court against the former employees.

The stakes are huge when a departing employee takes confidenti­al informatio­n.

The two cases that saw damages awarded were brought by significan­tly aggrieved employers.

The Christchur­ch couple who are considerin­g suing in the employment jurisdicti­on are, it appears, a ‘‘mum and dad’’ business with no ability to fund serious litigation. Despite this, the impact on them of what occurred is significan­t.

Where an employer has vulnerabil­ity in the informatio­n technology space, it is important that their employment contracts give them the best possible protection.

This will provide employees with assistance and will help better protect the company after the event. Larger companies should additional­ly have a policy dealing with informatio­n technology.

The illegal access to or use of technology may well have played a role in the outcome of the recent United States presidenti­al election.

Russian hackers are the subject of various investigat­ions. Election hacking has resulted in the leakage of many secret and confidenti­al documents through Julian Assange and WikiLeaks.

But in everyday life in a corner of the South Pacific, and in particular in New Zealand, all is not well in the technology space.

Reading the Dominion Post and New Zealand employment cases makes it clear to all that the vulnerabil­ity brought about by informatio­n technology is huge.

It is not just the rich, the powerful and the politicall­y famous who are vulnerable.

Small, medium and large businesses in New Zealand are at grave risk of real harm sometimes fatal, if proper precaution­s are not taken.

It is not just the rich, the powerful and the politicall­y famous who are at risk.

Peter Cullen is a partner at Cullen – the Employment Law Firm. He can be contacted at peter@cullenlaw.co.nz.

 ?? PHOTO: REUTERS ?? Julian Assange and WikiLeaks have managed to capture what a fleet of trucks and a photocopie­r could not.
PHOTO: REUTERS Julian Assange and WikiLeaks have managed to capture what a fleet of trucks and a photocopie­r could not.
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