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When employees leave a company, most of them want to take personal things from their desk with them and perhaps a souvenir of their old job. Others copy work-related files such as contact lists, project plans, marketing materials or code snippets from their computers. Then there are those who take the opportunity to raid notepads, pens or USB sticks. What is legal to take with you and what causes legal problems?
Jon Heimerl, head of the threat intelligence team at NTT Security, explains that departing employees can get into big trouble if they take company data or physical assets with them without their employer’s permission. Depending on what the employee steals, the employer could sue the employee or press charges for theft.
“I know of a company that fired an employee who then went to a competitor with proprietary information about a large research and development project,” says Heimerl. The company sent the competitor a letter from their lawyer saying: “We know you hired this employee. We have evidence that he took proprietary information and we will sue you and the employee.” The competitor then withdrew his job offer and the former employee needed a full twelve months to find a new job.
This is an extreme case, but there are always some gray areas when it comes to what you can and can’t take with you.
What you can take with you
“There are two categories of items you can take with you when you leave in the US: The first category is things you brought with you when you started work, like your own coffee cup and iPod,” says Chas Rampenthal, general counsel at software provider LegalZoom. The second category is things that you have been given permission to take with you. If an employee has written a carefully drafted legal brief and would like to show it to potential future employers, you can ask whether you can take it with you with certain changes.
Employees often take documents with them that they have created or helped design for the company, says Heimerl. This includes contact lists, project plans, code snippets or marketing materials so they have examples of their own work. “There is nothing inherently wrong with this,” he emphasizes, unless the documents contain customer data or internal information such as strategic plans or product pricing. In these cases, according to Rampenthal, the employee should ask the employer for permission to take such documents or work samples with them. Provided that the protected information is removed from the document, the employer may well allow this.
The situation is different if an employment contract or termination agreement was previously signed, which stipulates that all documents or codes developed for the company are the property of the company. If an employee takes such documents without the employer’s permission, the employer could sue the employee for breach of contract, explains Heimerl.
In addition, the employer could withhold the employee’s severance pay or require him to repay severance payments that have already been paid out. This is the case if the severance payment was linked to the condition that the employee was not allowed to take any company information with him.
According to Heimerl, US companies also allow people to take items that they have purchased for work but for which they have not received reimbursement. These include things like an ergonomic keyboard.
The only exception that might prevent employees from leaving with their property is a clear employer policy stating that employees are not allowed to bring personal property into the office. Some employers prohibit this to limit their liability if an employee’s personal property is damaged or stolen, explains Heimerl. If an employee ignores this policy and still brings something from home, the employer could claim those items as company property, but Heimerl doesn’t think many companies would go that far.
What you can’t take with you
“If you take an item, even a mouse, without the company’s permission, that is theft,” emphasizes Heimerl. If you steal a $3,000 laptop with software, that would be serious theft.
Different levels of theft can be punished in different ways. A company can file a police report and charge the ex-employee with theft. Typically, a police officer will come to the thief’s house or send a registered letter informing them that a report has been filed, explains Heimerl. The person then has a certain number of days to respond. Or a warrant is issued for theft of property. If the police do not handcuff the person and take them to jail, they will receive a court summons. “In every case that I know of,” says Heimerl, “the employee returned the laptop or paid compensation.”
Instead of calling the police, other companies determine the value of the stolen property and report it to the IRS as taxable income paid by the company to the employee. In the US, the employee is then required to pay taxes on the stolen property. According to Heimerl, on a fully equipped laptop worth $4,000, you can expect to pay taxes of $1,500.
If an employee stole a computer containing sensitive customer information, there is a chance that the employee could be charged in federal court with violating federal privacy and information security laws.
When personal property and company data come into conflict
There are cases where it is not clear what employees can and cannot take from their employers. This can happen, for example, if you use your personal smartphone or home computer for work and have work contacts, files or applications on these personal devices.
“Many companies prohibit the use of private devices for professional purposes, but in practice this is difficult to enforce,” says Rampenthal. Sometimes there are bring-your-own-device (BYOD) policies that allow employees to use their own devices. It is crucial that you understand these guidelines and adhere to them.
If a departing employee has work-related information on a personal smartphone, all work-related information must be removed from the cell phone. This is especially true if the company has a policy that prohibits the use of personal devices for work, Heimerl said. However, the employer cannot confiscate the employee’s private smartphone, keep it for inspection or even keep it completely. The company has no other option than to ask the employee whether the data has been deleted.
But what does an employee do if, for example, his work computer breaks down and he has to work on his private laptop for several weeks while the IT department procures a new computer? During this time, the employee has likely accumulated a significant amount of company data on their home computer. What rights and obligations does the employee have in relation to their computer and the company data stored on it when they leave their employer?
“In most jurisdictions, the company has no right to this information, nor to the personal property (the computer),” says Heimerl. Although the employer can require the employee to remove all company data from the personal computer, the employer cannot force the employee to make extraordinary efforts to locate all files, including temporary files and other copies, and delete everything in a secure manner – unless the employee has agreed to this at the outset.
If an employee has stored highly sensitive data on a personal computer that the employee uses for work, the employer may want to delete those files from the employee’s personal computer. Additionally, the employer may want a secure overwrite to be performed to ensure that these files cannot be restored, says Heimerl. However, the company cannot force an employee to do this on their own personal property. The only option for the employer is to hire another employee or an external company to do the secure overwriting.
In all likelihood, the employee will keep at least some company data on their personal computer. “Without the employee’s signature in an agreement stating that they will not use the information they have access to or will receive in the future, the employer has little recourse,” Heimerl said.
Preparation for departure
This is what employees should keep in mind to make their exit easier: If you know you want to leave, all personal items should be proactively removed from the workplace. In addition, according to Rampenthal, all personal photos, documents or other materials should be removed from company-owned computers, smartphones or other electronic devices before the termination is submitted.
“Give yourself time to secretly—not illegally, mind you—remove any personal information from your laptop, company-provided smartphone, or desk,” he explains. You can also warn the IT department in advance so that they don’t become suspicious when they notice that files are being downloaded to a USB stick. There are cases in which employees are immediately escorted off the premises after submitting their notice of termination. You will then no longer have the opportunity to get your things, he emphasizes. But a little planning and preparation goes a long way.
Conduct termination discussions correctly
Anyone who informs an employee of their dismissal should make sure that it is a conversation at eye level. Six tips for conducting conversations.
Make sure that none of his colleagues find out about the termination before speaking to the employee.
Prepare for the conversation: What factors make termination unavoidable? How can you respond to possible objections?
Be honest: Don’t sugarcoat the situation, but give your employee constructive feedback.
In any case, take into account that a dismissal is not just about a specialist or manager in a certain department, but about a person with all of their social and societal connections. This is especially important if you have not always valued the employee.
Give him enough time for his reactions such as anger or tears: If necessary, offer another conversation in a few days when the employee has collected himself again.
Always be open to further questions from the terminated employee in the next few days.
