A common issue when advising an employee changing jobs is how to deal with company information on the employee’s phone or personal laptop. Should the employee simply delete it? Or should a forensic copy be made before deletion to preserve evidence in anticipation of litigation?

A recent decision by U.S. District Court for the Northern District of Illinois gives comfort to those who opt for the more pragmatic approach of simply deleting the data. Even so, the case suggests steps that could have been taken to avoid litigation and a claim of destruction of evidence. 

Employee Deletes Files after Getting a Reminder Letter, Raising a Spoliation Claim

The defendant in Packaging Corporation of America, Inc. v. Croner[1] worked as a salesperson for plaintiff. Over the years, defendant saved work documents to his personal computer.

After defendant resigned to join a competitor, plaintiff sent a letter reminding him of his duty under his employment agreement to return any confidential information. Defendant searched his personal computer and deleted the confidential information he found.

Plaintiff eventually sued defendant, claiming among other things misappropriation of trade secrets. Plaintiff alleged defendant’s deletion of files was spoliation of evidence and created an inference he misappropriated trade secrets by using or disclosing the confidential information.

Court Finds Nothing Wrong With the Deletion

The court dismissed plaintiff’s trade secret claim for failing to allege facts showing a misappropriation. Defendant had been entitled to have the company information during his employment. His continued possession of it after resignation was not an improper misappropriation in the absence of any allegation he used or disclosed it.

The court also rejected plaintiff’s claim that defendant’s deletion of files after getting a reminder letter was spoliation of evidence creating an inference of misappropriation. “If anything, [defendant’s] deletions support his claim that he did not use or disclose any trade secrets – he took active steps to ensure that he was no longer in possession of confidential materials from his previous job.”

The court also found significant that defendant had made his personal computer available for forensic inspection by plaintiff and that no allegation was made that the inspection showed misappropriation.

Timing is Everything When it Comes to Deletions

Although defendant did not suffer any adverse consequences for deleting the information, he was perhaps fortunate in his judge. Some might have been troubled by his somewhat peremptory deletions.

There almost certainly would have been no issue had he deleted the information before resigning. Absent other facts suggesting misappropriation, an employee who deletes information that has been saved to personal devices in connection with work is simply complying with his or her employment agreement or common law duties.

It is a closer question whether an employee should do as defendant and delete information after getting a reminder letter. If the information was saved to the employee’s computer in the ordinary course of business, it may be safe simply to delete the information, especially if there is no sign the employer intends to sue. But if the information was saved to the computer as part of the process of planning the transition, the employee may risk a spoliation claim for destruction of evidence.

One more thing: the defendant in the Croner case voluntarily turned over his laptop for forensic review. Had he been a bit more thoughtful about the deletions, he might have avoided this presumably uncomfortable step.

[1] Case No. 19-CV-03286 (N.D. Ill. Jan. 3, 2020)

James L. Komie is an attorney with Howard & Howard in Chicago, IL. He regularly writes and speaks on new developments and trends in the law regarding non-competes and trade secrets, as well as issues relating to the financial services industry.