• At Kemp Little, we are known for our ability to serve the very particular needs of a large but diverse technology client base. Our hands-on industry know-how makes us a good fit with many of the world's biggest technology and digital media businesses, yet means we are equally relevant to companies with a technology bias, in sectors such as professional services, financial services, retail, travel and healthcare.
  • Kemp Little specialises in the technology and digital media sectors and provides a range of legal services that are crucial to fast-moving, innovative businesses.Our blend of sector awareness, technical excellence and responsiveness, means we are regularly ranked as a leading firm by directories such as Legal 500, Chambers and PLC Which Lawyer. Our practice areas cover a wide range of legal issues and advice.
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  • We bring our commercial understanding of digital business models, our legal expertise and our reputation for delivering high quality, cost-effective services to this dynamic sector.
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Technology issues on termination of employment

Technology has, in theory at least, enabled a much more productive employment relationship. For example, the advent of smartphones and tablets means, in theory, that work can be carried out at any time or in any place which should provide benefits for both employers and employees.

However, this flow of information via technological channels can result in a number of challenges and risks for employers, especially in relation to the termination of employment.  Swathes of confidential information are often predominantly stored on laptops or tablet devices which are invariably linked up to a smartphone meaning the potential for wide spread dissemination is high. Moreover, in the era of social media, there is plenty of scope for former employees to publish confidential information or inappropriate comments about their employer.
In this article, we explore some of these issues in more detail, and look at how best to manage the risks.
Inappropriate postings on social media
Social media unfortunately makes it very easy for a departing employee to disparage their employer or to reveal information about it.
Whilst an employer can’t do anything to guarantee that a former employee won’t post inappropriate remarks about them on a social media site, they can make it less likely and give themselves stronger grounds for taking legal action if a former employee does post something inappropriate. 
In particular, employers should ensure that their social media policy prohibits employees from talking about their employer, or on behalf of their employer, except with the employer’s express written consent, either before or after the termination of their employment.
If a former employee posts a potentially defamatory or otherwise unlawful statement, the employer should write to the former employee demanding removal of the content and putting the individual on notice of the causes of action that it has against him or her. These could include damages for breach of contract, if the employee agreed in his employment contract to comply with the employer’s social media policy.
The employer could also contact the host site seeking immediate removal of the material.
Unfair competition
As well as providing former employees with scope to disparage their ex-employers, social media also makes it much easier for former employees to keep in touch with their contacts when they move jobs. 
For example, when an individual changes jobs, LinkedIn would send out an update to that person’s connections.  In theory, an employer could require an employee to, for example, remove LinkedIn connections acquired during their employment.  In practice, however, this would be difficult to police and there would be little to stop the connections re-contacting the former employee themselves.
What this means, therefore, is that in the era of social media, enforceable restrictive covenants have become much more important.
The sorts of restrictions you should consider including in an employee’s contract including are: (a) a non-compete (to prevent the former employee working for/having an interest in a competing business); (b) a prohibition on soliciting clients/prospects or dealing with clients/prospects; and (c) a prohibition on employing fellow employees or soliciting them away from the ex-employer.
It is important to note, however, that post-termination restrictions of this nature are difficult to enforce – a court will only uphold them if they restrict the former employee no further than is necessary to protect the employer’s legitimate business interests.  Legitimate business interests can include the employer’s confidential information, their client base and the stability of the workforce.
It should also be noted that the reasonableness of restrictive covenants is judged by reference to the circumstances applying at the time that the employee signed them.  What this means is that restrictive covenants for key employees/roles should be reviewed from time to time, but particularly if an employee changes roles within an organisation  - what is appropriate (and therefore enforceable) in relation to one role, may not be appropriate/enforceable in relation to another role.
It is also important to remember that if an employer breaches an employee’s contract, the employee will no longer be bound by any on-going obligations (such as post-termination restrictions).  This could occur if the employer does something which amounts to a constructive dismissal of the employee, or more prosaically, by paying the employee in lieu of notice where it has no power to do so.
If a former employee does breach their restrictive covenants and these are enforceable, then the employer may be able to obtain an injunction against the employee to, for example, prevent them working for a competitor or dealing with particular customers.  Alternatively, the employer may want to bring a damages claim against the employee.
Retention/mis-use of confidential information
With the advent of remote working, USB sticks, tablets, affordable personal laptops and so on, it is becoming far more common for employees to store an employer’s confidential information on their personal devices (as often for convenience rather than for nefarious purposes).
Whilst during employment, confidential information is protected, following termination, only the narrower category of trade secrets (in effect a sub-category of confidential information which has a very high degree of confidentiality) are automatically protected by law.  It is therefore important that employers have properly drafted confidential information provisions in their employment contracts which identify all the relevant categories of information which are confidential and which are expressed to continue following termination of the employee’s employment.
The employment contract should also contain provisions prohibiting the employee from making of copies of documents except as necessary for the purpose of their duties and requiring them to return or destroy all copies of confidential information on the termination of their employment.  It is also advisable for employers to reserve for themselves a right to inspect the employee’s devices to ensure that their confidential information has been deleted from them.
Monitoring employee communications
One way in which employers may try to ensure that they are aware of potential leakages of confidential information, or potential unfair competition by their employees, is by monitoring employees’ communications (for example email, phone calls or internet usage).
Whilst in principle this might sound like a useful tool for employers, it also brings risks with it.  Most obviously, if employers are undertaking monitoring without good reason or in a disproportionate manner, this may place them in breach of the Data Protection Act 1998.  Historically, data protection legislation has been viewed as relatively ‘toothless’, but over recent years this has changed (for example with the increase in April 2010 in the maximum fines that the information commission could levy to £500,000).  Moreover, it will continue to change when the draft Data Protection Regulation comes into force as this moots fines of up to 2% of an organisation’s annual worldwide turnover. 
If an employer undertook monitoring of its employees in an inappropriate manner, or particularly if it singled out a specific employee without good reason, it might even face a constructive dismissal claim from the affected employee(s).
It is therefore advisable to have a clear policy explaining what types of monitoring the organisation may be doing and why, and what will be done with the information.  This should help ensure that employees do not have an unrealistic expectation of privacy in relation to their work communications. 
Employers should also ensure that the amount and invasiveness of any monitoring they undertake is proportionate to the perceived risk to their business, should consider alternative (less invasive) ways of protecting their interests and should ensure that any information obtained is kept secure and only used for the purpose for which it was obtained.
Accessing documents that are password protected or encrypted
Where information is confidential it is important that it should be protected by way of passwords, encryption etc.  Employers would be well-advised to spell out this requirement to its employees in an appropriate policy.  Equally, the policy (or employees’ contracts) should include an obligation on employees to provide details of passwords before the termination of their employment.
If an employee fails to provide details on termination of their employment, the first step would be to ask the employee to provide these voluntarily.  If the former employee is subject to a contractual obligation to provide these, there may be scope for the employer to take legal action against the former employee if they refuse to cooperate. 
In addition, there are various software programmes which can be used to “break” passwords or encryptions.  For example:
  • Dictionary attacking (this can establish the password used) – as its name suggests it ‘attacks’ the password recognition system by using all the words contained in a plain text dictionary. This is a relatively quick process and therefore useful if time is of the essence.
  • Brute force attacking (this also can establish the password) – the software will use all possible character combinations for a specified password length. This is most effective when the employer knows how many characters are in the relevant password but it is a slower process when compared to dictionary attacking due to the number of potential combinations.
  • Decryption (this can provide access to the document but not the password) – this software will try all possible character combinations and when successful it reveals a decrypted file but note that no password will be revealed.
Equally, if an employee has deliberately wiped data, there are various ways of potentially recovering this.
Conclusions - how some of these issues might arise in practice and how to tackle them
The pervasiveness of technology has undoubtedly made it easier for former employees to do damage to their employer’s businesses.  None of the problems should be insurmountable, however – the key is anticipating the types of issues that may arise and ensuring that you have the technical systems and legal policies in place to ensure that you are able to address the issues if they do occur.