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An extreme tool when trust has been broken

By Mark Repath

Companies place a considerable amount of trust in their employees. Confidential and sensitive information that has taken years and millions of dollars to develop is placed at the disposal of various employees within an organization. In the vast majority of cases, this confidential information and trust is not abused by employees.

However, almost every employer, large or small, at one point or another will deal with the scenario where a departing employee appears to have taken confidential information.

In the February 2018 edition of HR Professional, important practical and technical tools to help prevent and investigate these difficult scenarios were discussed. This article will discuss an extreme legal tool – the Anton Piller Order – that may be used by employers when all other measures have failed.

Briefly, the Anton Piller Order (so named from the British case of Anton Piller K.G. v. Manufacturing Processes Ltd.) is a court-ordered private search and seizure. An Anton Piller Order allows a plaintiff to conduct a surprise search of a defendant’s private property in order to seize and preserve evidence. In the scenario of a departing employee, an employer who is granted an Anton Piller Order typically searches the departing/departed employee’s home and a competing business the ex-employee has recently established or joined for evidence that the original employer’s confidential information has been taken.

Before going further, it is important to understand what an Anton Piller Order is not. An Anton Piller Order is not a tool to be used by the plaintiff for early discovery, or to go on a “fishing expedition” of suspected improper conduct by a departing employee. An employer attempting to get an Anton Piller Order will be required to provide evidence to the court that they already have a strong case against the employee. The tools discussed in the February 2018 edition of HR Professional – such as digital imaging technology – will be invaluable to meeting this initial threshold.

An Anton Piller Order allows a plaintiff to conduct a surprise search of a defendant’s private property in order to seize and preserve evidence.

An Anton Piller Order is also not an order that prohibits the defendant from using the impugned information after the search has been conducted. An Anton Piller Order is only to preserve evidence that might be destroyed before a trial. A companion injunction to prevent an employee from using the confidential information prior to trial must be brought.

Lastly, an Anton Piller Order is not cheap. It is one of the most powerful tools available in civil law and since it is usually sought without notice to the employee, the employer’s counsel must present the court with a fulsome and frank record. This will require a significant amount of counsel’s time to learn and present a persuasive case, which can only be done if the employer is willing to dedicate a significant amount of time and internal resources to determine the circumstances of the departure. Even after an Anton Piller Order is obtained from the court, executing the Order requires the employer to retain an independent supervising solicitor (ISS), an experienced lawyer who acts as an officer of the court in monitoring the search process. Although an ISS’s role is to be a neutral and independent party, ISS’s are not paid for by tax dollars. The employer must bear this cost if they wish to execute an Anton Piller Order in addition to costs associated with technical experts whose help is often required to search and image digital data that may be uncovered.

However, an Anton Piller Order is effective. With an Anton Piller Order in hand, the employer can, without warning, demand access to the employee’s property. The ISS will advise the employee that refusing entry or assistance with the search could result in a contempt order, which carries incarceration as a potential penalty.

The properly executed Anton Piller Order gives the employer the opportunity to present evidence at trial that would otherwise likely have been destroyed. With the increasing reliance on electronic data, and the ability to destroy or transfer incriminating documents in minutes (often with little or no trace), the opportunity afforded by an Anton Piller Order to search a person’s private property – before they even know a lawsuit has been brought against them – and seize evidence is invaluable.

Without the benefit of a search executed under an Anton Piller Order, an employer is usually left speculating at how a recently departed employee was able to develop a nearly identical product to that being made by the employer, in such a short period of time. Speculation will not go very far in convincing a court to grant an Order for damages against the employee for breach of confidentiality, breach of fiduciary duty or the like.

On the other hand, if confidential documents and/or data belonging to the employer are uncovered during a search pursuant to an Anton Piller Order, the court will hear this evidence and can reasonably infer that the employee has abused the trust bestowed upon them. From there, it is likely not a question of if damages are appropriate, but how much.

Mark Repath is an associate at Van Kralingen & Keenberg LLP.

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