Data Theft by Employee: What to Do and Preventive Measures

In today’s technological world, data plays a vital part in every industry. This data can either be personal, confidential, or professional, including the pertinent information of the clients, companies’ trade secrets, etc. Data and information in electronic form have a higher chance of being stolen compared to traditional forms of data like the ones on paper. The quantity by which electronic data can be stolen is also immensely formidable. In this post, we will discuss What you can do and preventive measures to follow in case of data theft by an employee.

What is Data Theft? The Indian IT Law in Case of Theft

The word Data is defined under Section 2(o) of Information Technology Act, 2000 as:

‘ Data’ means a representation of information, knowledge, facts, concepts or instructions which are being prepared or have been prepared in a formalized manner, and is intended to be processed, is being processed or has been processed in a computer system or computer network, and maybe in any form (including computer printouts magnetic or optical storage media, punched cards, punched tapes) or stored internally in the memory of the computer.”

IT Act has categorized the types of information which can be considered as sensitive personal data. These are as follows:-

  • Password
  • Financial information such as Bank account or credit card or debit card or other payment instrument details
  • Physical, physiological and mental health condition
  • Sexual orientation
  • Medical records and history
  • Biometric information

In plain and simple language, data theft is a process by which a person copies, remove, or steals any information from any organization or computer of another person without their knowledge or consent to cause wrongful loss or for their own gain.

Section 43-A and Section 72-A of the IT act deals with the offense of data theft and its punishment, respectively.

Data Theft by Employee: What to Do and Preventive Measures

Prevention Is Always Better Than Cure

It is always advised that an organization takes some preventive measures beforehand for data theft by employees. Some of these include:

  • There should be a detailed policy that deals with data protection for every employee.
  • It is pertinent to include non-disclosure and a confidential clause in the employment contract of the employee.
  • Better and modern technology should be used by the organization to get up to date information as well as to keep track on all the employees.

Related: How to stop employees from installing software from the Internet.

  • Every company/ organization should have its IT department to deal with such issues with expertise.
  • At the time of termination of an employee, all the devices used by him/her should be secured and verified by the IT department.

What to Do in Case of Data Theft by Employee?

Apart from the above mentioned precautionary measures, the following are some of the legal remedies available to an employer in case of data theft:

  • Section 43(Penalty and compensation for damage to the computer, computer system, etc.), Section 65 (Tampering with computer source documents), Section 66 (Computer-related offenses), Section 72(Penalty for breach of confidentiality and privacy) and Section 76 (Confiscation) are some of the provisions of the IT Act under which a complaint can be filed by the employer.
  • A civil suit under the offense of ‘Breach of Contract’ can be filed by the employer.
  • Section 405 and Section 408 of the Indian Penal Code, which deals with ‘Criminal Breach of Trust’ will be applied while punishing the offender.
  • Apart from these two, Section 378, which deals with ‘Theft,’ can also be applied. Although the section does not clarifies whether ‘data/information’ can be included or not as this section only deals with only theft of movable property. But if the information has been stored in a hard disk, pen drive, computer, laptop, CD/DVD, etc., it would fall under the category of movable property.
  • If the stolen information is shared with others, the employer can even bring charges under the offense of Copyright Infringement under the Copyright Act.

If you need any help in case of any data theft by an employee, feel free to drop a comment!


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