It has long been supposed by many that restrictive covenants in an employment or engagement contract are largely unenforceable and not really worth the paper they are written on. This is not true; properly and fairly drafted restrictive covenants which legitimately protect the specific business interests of an employer are likely to be enforceable, provided they don't try to impose an unfair restriction on trade.
However, in a new twist, a recent case has shed light on a criminal element in client data theft, via the good old Data Protection Act. This has been highlighted by the Information Commissioner's Office in a recent press release regarding the case of a man who was convicted after sending personal and commercially sensitive information concerning 957 clients of his employer to his personal email account as he prepared to join a rival company.
Data Protection Act – criminal litigation risks
So, rogue employees be warned – taking client records to a new employer may be a criminal offence under the Data Protection Act 1998, punishable by a fine on conviction.
The ICO is even calling for harsher penalties, including custodial sentences, to punish offenders, so it really is time to put down the flash drive and think again.
Hopefully companies have more protection than they might think, after all, an employee evading a civil court issue is one thing, but risking a criminal record is quite another. In fact in some industries (e.g. Financial Services) it could lead to a banning order.