The Supreme Court gave instructions regarding the regulation of illegal acquisition use and disclosure of business secrets


2023 - 07 - 19

COBALT’s Managing Associate Kadri Michelson represents TREV-2 Group in a lawsuit where a former employee sent several sensitive employer materials to his personal e-mail address shortly before the termination of his employment. These materials were revealed to the employee during his employment time. Naturally, every employer would question the real intent and permissibility of such an activity. Doubts about its legality are further increased if the employee starts working for a direct competitor of the former employer, as in this case.

TREV-2 Group was convinced that sending business secrets to a personal e-mail could not be related to work duties, but rather to the desire to grow one’s know-how and use it for personal benefit. As a result, TREV-2 Group filed a lawsuit against the former employee, claiming a violation of the obligation to keep business secrets and demanding a fine. Neither the County nor District Court saw a violation of the employee’s obligation to keep business secrets, as the employee was not prohibited from using his personal e-mail. However, the Supreme Court took a broader approach and agreed that a situation where an employee sends sensitive materials to his personal e-mail, which are not necessary for his work duties can still be considered a violation of the use of business secrets according to the Restriction of Unfair Competition and Protection of Business Secrets Act and violation of the duty of loyalty according to the Employment Contracts Act.

Although the dispute continues, the instructions provided in the Supreme Court’s decision on the regulation of the illegal acquisition, use and disclosure of business secrets (Restriction of Unfair Competition and Protection of Business Secrets Act Article 5) are valuable knowledge for every employer and employee. This is particularly important given that there has been no Supreme Court practice regarding the application of the previously mentioned Act of business secret protection regulation.

To summarize:

  • In the employer’s legitimate interest, he may impose a duty of confidentiality on business-related information that is secret or difficult to access, has commercial value, and necessary measures are used to keep information confidential.
  • The employer must clearly inform the employee which information is confidential, and if the employer has not informed the employee of the information designated confidential in writing, it is assumed that the employee does not have an obligation to keep it secret.
  • To rebut this presumption, the employer can prove that the employee knew the content of the classified information or should have known it, considering the employee’s duty of loyalty and level of diligence.
  • Sending materials containing business secrets to the employee’s own personal e-mail address is considered copying according to Restriction of Unfair Competition and Protection of Business Secrets Act Article 5 (1). Sharing electronic data can create a copy of the materials.
  • Copying files during work (including electronic transmission to one’s personal e-mail) does not constitute a violation of Restriction of Unfair Competition and Protection of Business Secrets Act Article 5 (1) p 1 and Article 5 (3) p 1.
  • Copying of documents or files containing confidential information obtained without the permission of the employer, and copying documents or files obtained with access not granted or guaranteed by the employer, is considered illegal acquisition of business secrets according to Restriction of Unfair Competition and Protection of Business Secrets Act Article 5 (1) p 1 and Article 5 (3) p 1.
  • The alleged violation of an employee who has legally obtained a secret can be assessed according to Restriction of Unfair Competition and Protection of Business Secrets Act Article 5 (3) p 2 and p 3 (the employee violates the obligation not to disclose business secrets or violates the obligation to limit the use of a business secret).
  • Sending employer documents to your e-mail address that are not necessary for work tasks can be considered as using them for personal purposes.
  • Violation of the obligation to keep business secrets confidential can also be considered as a violation of the duty of loyalty stipulated in the Employment Contracts Act Article 15 (1), which must be determined as well as assessing the degree of diligence of the employee according to the same Act Article 16.

Our team included Managing Associate Kadri Michelson and Junior Associate Dina Tanaga.

Leading experts

Managing Associate
Estonia
Junior Associate
Estonia