To prevent leakage of confidential information, companies sometimes monitor their employees’ emails and communication records through software, and, as a result, may actually find their employees breaching of confidential information. At this time, they are likely to wonder: Is it legal to use software to monitor employees? Is it ok to use the evidence gathered by this method in litigations?

For example, Company X is a well-known technology start-up. In response to the change of work style after the pandemic, it allows its employee to work from home one day a week. But Company X’s person in charge, A, is concerned about the risk of leaking confidential information by employees working from home, he instructed IT staff to install monitoring software in the employees’ computers to monitor the communication apps and emails of the employees. One day, A received notification from the IT staff that a senior engineer, B, sent Company X’s important trade secrets to an unknown outsider through company email and communication app. A then instructed IT staff to consolidate the relevant evidence obtained from monitoring and filed a criminal action and civil claim against B. During the litigation, B learned that the relevant evidence was obtained from monitoring, he also filed a lawsuit against A.

With respect to this case, there are three points to address:

1. Is it legal for A to instruct IT staff to install monitoring software on B’s company computer?

Based on current judicial practice, the key for determination lies in whether the employee has a reasonable expectation of his privacy. Simply put, if the company has informed the employee clearly about the company’s related regulations and the employee has agreed to them, the monitoring is more likely to be deemed legal, since the employee has recognized the possibility of monitoring (but it should still not go beyond reasonable and legitimate purposes.)

On the other hand, if Company X did not inform the employee but started monitoring the employee’s emails or communication apps on its own, it would be infringing the employee’s privacy, and the company and its managers may be at risk of lawsuits from the employee.

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2. Can the information obtained from monitoring B’s company computer be used as evidence in the litigation?

As mentioned earlier, if Company X informed B about relevant regulations, then it would be less questionable that the information obtained from the monitoring software could be used as evidence in court. But if Company X did not inform B of the relevant regulations in advance and thus result in infringement of his privacy, making the monitoring possibly illegal, can the information obtained from the monitoring still be used as evidence in court?

In this regard, there is judicial practice holding that relevant information still has the admissibility of the evidence in court (see Taiwan Taichung District Court Judgment 107-Su-Zi No. 531). However, it should be emphasized that while protecting trade secrets, decision-makers should not only focus on whether evidence collection can be accomplished, otherwise the company and the decision-makers themselves may be subject to a high risk of litigation.

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3. Practical Advice: Setting clear boundaries for monitoring and obtain consent from employees

To prevent leakage of trade secrets and maintain a company’s competitiveness, proper management is essential. However, in order to also protect the employees’ privacy, it is advised that if the employer intends to implement monitoring measures, the following steps should be taken first: 1. Conduct training and promotion of information security; 2. Set up regulations and policies for information management (expressly stating the scope of monitoring); 3. Obtain consent from the employees. In this way, a company can ensure the effective operation of its trade secrets management system as well as effectively avoid legal risks for the company and its decision-makers.

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This article was published in the Expert’s Commentary Column of the Commercial Times. https://www.ctee.com.tw/news/20240308700119-431305

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