May / June 2010
06 July 2010

The return of data theft and covenant breach in the recruitment industry May / June 2010

As the recruitment industry starts to recover, so the likelihood of wrongdoing by consultants who choose to hop from agency to agency or set up in competition on their own grows. As lawyers specialising in this area, we forecast a sharp increase in 2010 in incidents of data theft and breaches of covenant by consultants as the industry begins to bounce back from 18 months of recession. 15 years’ experience advising and litigating in this industry has taught us that the most valuable assets of a recruitment company are its relationships with its clients and candidates and the corresponding records stored on a database. While they are employed, consultants work tirelessly to develop, maintain and record these relationships for the benefit of the company. However, the same consultants often appear confused as to who owns that relationship and the data when they leave to join a competitor or set up on their own. This report seeks to build on and refine statistics compiled by us in this area from over 130 data theft and covenant breach cases that we have prosecuted for recruitment industry clients in the past three years. The primary purpose of this report is to provide those involved in the recruitment sector with an understanding of the key areas of risk, based upon our experience of dealing with problems of this type, so that you can take action to protect your business and mitigate the financial exposure caused by such conduct.