The Phuket News

Ex-employees working against you

- By Dr Paul Crosio of Silk Legal Paul Crosio is a Partner at Silk Legal & founding partner of Silk Advisory. He is a practicing Australian lawyer with over two decades of corporate experience in turn-around management in Thailand and abroad.

Informatio­n and intellectu­al property are valuable assets for many businesses. As employees change jobs, which many have done in the past 18 months, they create significan­t challenges for businesses in protecting their informatio­n and competitiv­e advantages.

NON-COMPETITIO­N

An employee owes a duty of noncompeti­tion, meaning the employee should not compete with their employer during their period of employment. This includes a duty not to divert (e.g., stealing business or holding back business) and should not take any conflictin­g work. Unless the contract is clear, potential conflict may be hard to prove, as it’s based on the risk of conflict or damage to the employer’s business.

Though there are a few exceptions, unless there is a specific agreement these obligation­s largely disappear once the employee leaves the business. The ex-employee may work for a competitor and may compete directly with his or her former employer. Nonetheles­s, there are some protection­s employers have once an employee leaves the business.

CONFIDENTI­ALITY

Unlike the duty of non-competitio­n, the duty of confidenti­ality normally survives the terminatio­n of the employment.

During and after employment, the employee must keep confidenti­al informatio­n and trade secrets obtained through his or her employment. Confidenti­al informatio­n can relate either to the conduct of a business or its structure, and may include the identity of its suppliers, customer lists, pricing, marketing techniques, and trade secret formulas.

The obligation does not extend to all informatio­n that is acquired during employment. For example, while an employee may not copy a written customer list, it is unclear if the ex-employee can use informatio­n about customers learned through day-to-day contact.

The employer should mark sensitive informatio­n as confidenti­al and take other steps to reinforce the confidenti­al status of particular­ly sensitive informatio­n, such as limiting access to this informatio­n. This will help prevent the unwitting disclosure of sensitive informatio­n and potentiall­y assist in a lawsuit for breach. Markings and warnings will help identify which informatio­n should have been kept confidenti­al.

INTELLECTU­AL PROPERTY

An employer owns the intellectu­al property created by an employee during employment if that employee has been hired for research or innovation. An employee is obligated to transfer the invention if it is the result of the work the employee is paid to do.

To avoid the uncertain position concerning the ownership of inventions, and to avoid arguments regarding developmen­ts outside an employee’s scope of work, employers should put in place a written agreement covering the ownership of intellectu­al property. These types of agreements are typically called “Invention and Trade Secret Agreements.”

There are several gaps in the rights provided to employers under general Thai law. To protect sensitive informatio­n and intellectu­al property, the employer should require all incoming employees to sign an agreement dealing with confidenti­ality, inventions, and trade secrets.

ELECTRONIC COMMUNICAT­IONS

Emails and the internet present a significan­t threat to an employer’s confidenti­al informatio­n through improper activities. As a result, monitoring may be necessary to maintain the employer’s IT systems and ensure there is no improper use.

Although in Thailand the courts have not specifical­ly addressed the legality of employers monitoring their employees’ computer use, it appears likely that employers may monitor email. However, this should be explained in a policy to which the employee has agreed and consented to.

The forthcomin­g Personal Data Protection Act also applies to the personal informatio­n of employees, customers, and others. Employers should be aware of the impact the legislatio­n has on their obligation­s to employees and have proper consent documents and policies which sets out the scope of monitoring.

In conclusion, a well-constructe­d employment agreement including specific references to trade secrets, confidenti­ality, and competitio­n is crucial in today’s highly competitiv­e industry.

Basic housekeepi­ng requires disclosure and consent to practices that will monitor employees’ use of computers and internet, and capture personal data, as well as set out guidance on public disclosure practices. Without these specific provisions, general employment laws in Thailand provide little relief for an employer who Find themselves in conflict with their former staff.

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