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Dimitry K., Esq.
Dimitry K., Esq., Attorney
Category: Business Law
Satisfied Customers: 41220
Experience:  Run my own successful business/contract law practice.
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Im not sure if this is the correct department but I have

Customer Question

I'm not sure if this is the correct "department" but I have a question in regard to possible insider trading/info.

I have a friend in New York (let's call her Ms.Friend), who has been working at a worldwide, renowned internet search company (the most popular internet search company as of today. Let's call this Co.Big). She works in the subsidiary of this large company, which specializes in internet ad serving services.

There was another employee there (let's call him Mr.Resigned) who had resigned not too long ago, to join a startup company (let's call this company Co.Start) that focuses on technology platform for video management and monetization.

Now, to make long story short, Mr.Resigned and Ms.Friend had begun a not-so-professional relationship without the knowledge of any other employees of either companies. Recently Ms. Friend had requested to transfer to the Co.Big's main office in California. Mr. Resigned requested to be transferred as well to another office that Co.Start has in California, which happens to be near Co.Big's main office.

They are now living together, and they do not wish to disclose this info to either employers. Now, as a friend and as a colleague, there are concerns that their relationship has been allowing Mr.Resigned to stay too closely connected to all the information within Co.Big, which could be helping him build the operations and the businesses at Co.Start.

I'm not exactly sure if the two companies are considered competitors, as they seem to specialize in different aspects of internet technology, but would it be possible that Ms. Friend and Mr.Resigned are doing something illegal? Should there be any concerns if other employees found out about their relationship? Could they possibly jeopardize their employment due to this ongoing relationship?

I am a friend and a colleague to Ms. Friend. While I really appreciate her, I am getting concerned that there are some confidential information that has been passed around. If so, what would be the wisest way to do something about this? Is it my responsibility, as someone who may be the only one who knows what's going on, to report them?

I thought that it'd stop once she transferred to another state; but seeing how he quickly transferred with her, I'm getting a bit more concerned. Please help...
Submitted: 5 years ago.
Category: Business Law
Expert:  Dimitry K., Esq. replied 5 years ago.
Thank you for your question.

Besides suspicion, is there actually any sort of direct proof or evidence that Ms.F is providing any sensitive information to Mr.R?
Customer: replied 5 years ago.
No, there are no direct proof or evidence.

Without proof or evidence, are they safe from any repercussions?
Expert:  Dimitry K., Esq. replied 5 years ago.
Thank you for your follow-up.

If there are only suspicions, they are just that--suspicions. Without direct information the company cannot act or take any action against either the ex employee or the current employee. If the company does take action, both can file a fairly strong claim for defamation of character, harassment, and the employee can also file sue for hostile work environment, retaliation, possibly wrongful termination if she loses her job, and damages.

Competitors are free to have relationships. A Wells Fargo employee is free to date an Ameritrade employee. A high level Walmart executive is able to engage in a relationship with an executive from Target, and so forth. Their relationship, without actual proof is simply a relationship.

Third, unless you are an actual employee of the company, you have no duty to disclose the possible transfer of information. Ultimately if they are committing a crime, it is their issue, and you legally are under no duty to stop it, unless you are somehow furthering their crime in some way.

Good luck.
Expert:  Dimitry K., Esq. replied 5 years ago.
Thank you for your follow-up.

If there are only suspicions, they are just that--suspicions. Without direct information the company cannot act or take any action against either the ex employee or the current employee. If the company does take action, both can file a fairly strong claim for defamation of character, harassment, and the employee can also file sue for hostile work environment, retaliation, possibly wrongful termination if she loses her job, and damages.

Competitors are free to have relationships. A Wells Fargo employee is free to date an Ameritrade employee. A high level Walmart executive is able to engage in a relationship with an executive from Target, and so forth. Their relationship, without actual proof is simply a relationship.

Third, unless you are an actual employee of the company, you have no duty to disclose the possible transfer of information. Ultimately if they are committing a crime, it is their issue, and you legally are under no duty to stop it, unless you are somehow furthering their crime in some way.

Good luck.

Edited by Dimitry Alexander Kaplun on 1/4/2011 at 9:09 AM EST
Customer: replied 5 years ago.
I am actually a direct employee and work closely with Ms. Friend. Should I be concerned?

I do not want to report anything if there are no proof/evidnece. However, even with proof/evidence, i feel as it could backfire to jeopardize my own employment.
Expert:  Dimitry K., Esq. replied 5 years ago.
Thank you for your follow-up.

Do you somehow feel or worry that information that you are working on is being sent to the other outside party?
Customer: replied 5 years ago.
I know that he has seen the materials that we have been working on.

And what would be considered proof/evidence?
Expert:  Dimitry K., Esq. replied 5 years ago.
Thank you for your follow-up.

In that case you may want to go speak with HR and your superior in confidence, and see if they can investigate your suspicions further. If it is indeed found that your friend is conspiring, she may be criminally and civilly liable. Criminally she may be pursued for theft of company secrets, conspiracy, and various cuber fraud statutes if she used a computer. Civilly the company would be able to file suit against her for any damages that the company calculated she may have ended up causing through her disclosures.

Good luck.

Edited by Dimitry Alexander Kaplun on 1/4/2011 at 9:41 AM EST