Retiree sued for leaking confidential information to competitor...Law: "It's not a trade secret."

Unable to specify specific items, business confidentiality conditions not met
The contract prohibiting job change is itself illegal and cannot be questioned.

The court ruled that there was no need to compensate a retiree who was sued for damages by the company for leaking key information to a competitor.

This is because the key information claimed by the company does not constitute a trade secret.

On the 20th of last month, Suwon District Court Seongnam Branch Civil Division 3 (Presiding Judge Song In-kwon) ruled that the plaintiff lost the lawsuit filed by the company against retirees A and B and competitor company C to prohibit job change and trade secret infringement.

Mr. A and Mr. B worked at the manager level in the sales department at the time of their employment, and left the company in early 2020.

Afterwards, they transferred to C Corporation, which was conducting similar business, in August of the same year.

The plaintiff claimed that defendants A and B, who were in positions with access to information, handed over the information assets they acquired during their employment to Company C, causing enormous damage to the company's business, and demanded compensation of approximately 210 million won.

In addition, it was claimed that Mr. A and B did not implement the agreement even though they had signed an agreement prohibiting job change.

Under current law, if an employee who handles a company's trade secrets discloses confidential information to the outside world, he or she may be subject to criminal punishment of up to 15 years in prison or a fine of up to 1.5 billion won.

Additionally, you must be held liable for civil damages.

However, the court determined that the information in the case did not meet the requirements of a trade secret.

The court said, “Based on the evidence submitted by the plaintiff, it is difficult to admit that defendants A and B secretly took out the information in this case or used it to conduct business.”

He continued, "There is no data that shows what information was exported, and it cannot be said that A and B exported the information in this case regarding the companies in question just because some of the companies that Company C did business with are the same as the plaintiff's business partners."

He added, "A and B were indicted on charges of breach of trust and leaking trade secrets in relation to this case, but they were all found not guilty. In the case of company C, the prosecution decided not to indict, saying there were no charges."

Attorney Kim Yong-tae of Daeryun Law Firm (Lihan), who acted as legal representative for the defendant, explained, "The key information claimed by the plaintiff is ambiguous in substance and cannot be specified, and even if specified, it does not constitute a trade secret. Even if the agreement prohibiting transfers is an issue, the plaintiff's claim cannot be established in that the agreement itself is invalid as it violates Article 103 of the Civil Act, including the three-year prohibition period."

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