Our firm recently acted for a company in the manufacturing sector in a claim against a former senior employee who resigned abruptly to join a direct competitor. The case involved allegations of breach of employment contract, breach of confidentiality, misuse of company information, and unlawful interference with trade..

The employee had worked with the company for several years before resigning suddenly and paying salary in lieu of notice. On the very day of her resignation, she joined a competitor led by a former industry player. Following her departure, the company discovered that large volumes of business emails, quotations, order forms, vendor registrations, and customer lists had been deleted from her work computer. The company also found that the work phone’s SIM card had been returned in a damaged state, preventing access to customer data. Despite repeated requests, she failed to conduct a proper handover and only later admitted to retaining customer contacts.

We presented evidence that the employee had not only failed to return company property but also used confidential customer information to approach clients for her new employer, thereby interfering with the company’s business. Forensic IT analysis confirmed large-scale deletion of crucial records just days before her resignation.

The High Court found in our client’s favour, holding that the employee had indeed breached her employment contract and confidentiality obligations, and had unlawfully interfered with the company’s trade. The Court reaffirmed that an employee’s duty of confidentiality continues even after resignation, especially when sensitive client information is involved.

While the company’s claim for millions in lost profits was not fully allowed, the Court awarded a mandatory injunction compelling the return of all company property, special damages for IT forensic costs, and exemplary damages as a deterrent to similar misconduct. In total, our client was awarded RM100,000 in damages and RM50,000 in costs, with interest.

This case underscores a vital lesson: confidential business information belongs to the company, not the employee, and courts will protect employers against the misuse of such information by departing staff. Employers should also ensure robust handover procedures, digital security measures, and properly communicated employee handbooks to minimise risks.

At our firm, we have extensive experience representing businesses in employee misconduct claims, breach of fiduciary duty, trade secret protection, and unlawful competition disputes. If your business is facing challenges from employees who resign and join competitors, we can help you safeguard your interests and pursue remedies through the courts.

📞 Contact us today for a confidential consultation to protect your business from employee misconduct and unfair competition.

Written By Lawyer Khoo