Former Employee Steals Proprietary Data From Recruitment Firm

This case involves an executive recruitment firm that allegedly had proprietary data stolen from them by a former employee. Over the course of 6 years, the recruitment firm started and cultivated a database of over 10,000 industry clients and candidates. An employee who had been with the firm since its inception (and had signed a non-disclosure agreement) downloaded a significant amount of database information before leaving the company for a more senior position at a specialized recruitment firm. It was alleged that the information taken caused significant damage to the firm. An expert in executive recruitment was sought to opine on whether such data is considered proprietary in the industry.

Question(s) For Expert Witness

1. Please describe your experience in executive recruitment.

2. Under what circumstances, if any, are client and candidate databases considered proprietary in the industry of executive recruitment?

Expert Witness Response E-071591

I owned a recruiter training and consulting firm and trained over 4,500 recruiting firms from more than 35 countries with my programs. Concurrent with that, I extensively consulted and coached recruiting firm owners. I have served as the president of several recruiting trade associations, and I currently sit on the board of one. I produced one of the top-rated podcasts in the industry and delivered as many as 50 paid speaking and training engagements a year. I continue to actively work in the industry as a practitioner of executive search and have done so since 1995. I have worked in heavy industrial type industries and currently recruit partners for law firms. An employee who signs a non-disclosure agreement and violates it is wrong in doing so. It is pretty simple. In terms of whether databases are considered proprietary in the industry, in my niche of legal recruiting, for example, all of the information about who works where is online. This minimizes the impact of the loss if the databases are sold because the data can easily be recreated. But even using resources such as LinkedIn can be cumbersome. If there is not such an easy way to replicate the stolen data, this strengthens your client's argument, as it increases the value of the data.