What liability is there if an liability employee steals customer information and starts a new company using that customer data?

While working for us, a sales person started his own company and stole new leads and sold customer products from his new company. He destroyed the customer records and 1 customer thought he had bought the products from us. Is there any criminal or civil liability?

Asked on July 28, 2010 under Employment Labor Law, Indiana


M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Yes I believe that there may be both criminal and civil liability.  Does he have an employment contract?  Is there a non-compete clause?  It may or may not be upheld if the employee can prove that you breached the agreement first in some way. 

In general, the ex employee stole something from you: your ability to sustain your business and livelihood.  He dissipated your records as well.  If he duped the customer in to thinking he was buying from you that could also be small business fraud: fraudulent disbursement of cash to him rather than you.  Seek legal help from an attorney in your area and see if he or she can help you with the civil suit as well as pressing criminal charges. And ask about an injunction as well. Good luck.

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