Why you need to be careful what you take with you when leaving a company

Photo: iStock.

No-one can take away your knowledge and your skills. These, just like your good looks and happy outlook on the world, are yours to keep.

Other information specific to your work, more properly called intellectual property, is owned by your employer and can’t be taken with you when you depart.

But just what is yours and what is the company’s?

Two recent cases in Australia highlight the dangers and subtleties of identifying what belongs to whom.

Online labour marketplace companies Freelancer and Airtasker are brawling over who came up with the concept for the Like a Boss ad campaign.

Freelancer, headed by high-profile entrepreneur Matt Barrie, says the Airtasker campaign is so similar to its own advanced plans that it can’t be a coincidence.

It notes that staff formerly at Freelance are now at Airtasker.

The second case involves a database of customer details. Fashion startup Showpo is suing rival online retailer Black Swallow and a former staff member.

Joellen Riley, professor of labour law at the University of Sydney, can’t comment on specific cases but says there are some basic principles which apply.

Your know-how

The first is that you can take your own skills and know-how away with you.

“But you can’t take any valuable property that you created in the course of your employment,” she says. “That belongs to your employer.”

She says Australian employment contract law principles generally favour the employer’s ownership of valuable intangible property.

“Even something as mundane as a telephone list can be subject to copyright,” she says.

“There are plenty of cases about client and customer lists. Copying them to take with you is definitely forbidden. Drawings, plans, designs — any embodiment of ideas — can be protected by copyright.”

The Copyright Act allows a court to award damages for a flagrant breach of copyright.

“It is not only the employee who leaves with valuable client lists or copyright material that has a problem,” says Riley.

“The new business employer can be required to surrender up or destroy copies of the material, and give an account of profit made from its use.”

Here are three basic principles:

    1. Employees have a duty to their employer. This prevents them from acting in any way that competes with the employer.

    “So spending time while you are still employed, gathering up information and copying client and supplier lists, etc, is a breach of your employment contract,” Riley says.

    “If you take stuff like that away with you to a new business, your former employer can seek an order that you must surrender up, or destroy, all copies of things you have taken.

    “Even if you create something yourself while you are in a job, it belongs to your employer. So a set of drawings for an ad campaign will belong to the employer of the designer – not to the designer her/himself.”

    2. 2. An employee must keep their employer’s information confidential.

    “And this duty carries over to the time after you leave,” she says.

    “The kinds of information that has regularly been found to be confidential includes information about client preferences, contract arrangements with suppliers and sponsors.”

    3. Non-compete clauses in employment contracts. This means that departing employees cannot work for a rival for a period of time.

    So long as the non-compete period is not unreasonably long, Australian courts have been willing to grant injunctions stopping people from going to other jobs for a period of time.

However, arguing over who owns what can be an exercise in futility in a world where information and ideas travel quickly and far and wide across digital platforms and social networks.

Mike Haywood, the founder of LiveHire, a platform which creates pools of pre-qualified candidates for companies, says companies can get too caught up playing defensive when they should be focussed 100% on delivery and their clients.

“You rarely win a footy game by flooding the backline and the game of business is no different,” he told Business Insider.

“Ideas are 1%, execution is 99%.”

Haywood say companies should think more about how they retain great employees, and build an environment around how work gets done as a team productively, rather than trying to protect ideas from spreading.

“If another company does what you were saying you were going to do, it’s your own fault for procrastinating,” he says.

The definition of intellectual property is changing

And the whole notion of intellectual property is changing, according to Anthony Mitchell, co-founder and chairman of strategic leadership firm Bendelta,

Traditionally, content rights have been licensed or sold according to geographic area. However, these borders mean little in an online world.

“Similarly, the notion of what it means to be an employee has radically changed,” says Mitchell.

“Apple leveraged this paradigm shift brilliantly when the key contributors to the success of the iPhone have been the app developers who’ve created the content– none of whom are employed by Apple.

“Rather than focus on developing and protecting their IP, they managed to convince third parties to lend theirs to them.”

Putting aside the detail of individual employment contracts, Mitchell says the changing nature of work has two major implications.

“Firstly, it’s harder to find things that are protectable when you can find most things online somewhere,” he says.

“Secondly, when your reputation as an employer is available to the world, you may think twice about just how litigious you want to be — especially if your chances of winning are slim.”

NOW WATCH: Ideas videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.