Access Public Relations Agency Ltd. was accused of inducing the employees of eCom Public Relations Agency Ltd. to resign, improperly contesting its trading counterparts, and obtaining its business secrets by improper means in possible violation of the Fair Trade Law

Case:

Access Public Relations Agency Ltd. was accused of inducing the employees of eCom Public Relations Agency Ltd. to resign, improperly contesting its trading counterparts, and obtaining its business secrets by improper means in possible violation of the Fair Trade Law

Keywords:

resigning employees, prohibition of business strife, improperly contest trading counterparts, business secrets

Reference:

Fair Trade Commission Decision of November 4, 2004 (the 678th Commissioners'Meeting); Letter Kung Yi Tzu No. 0930008552

Industry:

Business Management Consultation Services (7402)

Relevant Laws:

Articles 19 (iii), 19 (v), and 24 of the Fair Trade Law

Summary:

1.	The case originated from a complaint letter filed by eCom Public Relations Agency Ltd. stating in short that the general manager of Access Public Relations Agency Ltd., Chen (hereinafter referred to as "Chen"), originally served as the general manager of the complainant. However, Chen suddenly resigned on April 17, 2002. In addition to taking away the entire staff of the complainant, Chen also made the complainant's clients think that the complainant's E-mail would soon be invalid and caused the clients to send their contacting affairs to Chen's private E-mail box. Moreover, Chen failed to return the relevant contract materials and information of the clients on the day of resignation. It seemed like that Chen continued utilizing these materials to compete with the complainant for clients and have business contacts with the complainant's clients, impacting the complainant's competitiveness. The complainant claimed that the respondent's aforementioned acts violated Articles 19 (iii), 19 (v), and 24 of the Fair Trade Law.
2.	Upon the investigation, the Fair Trade Commission found that:  (1) With regard to the allegation that the complainant's resigning staff transferred to the respondent's company, the said staff stated that Chen did not request them to transfer by deception, coercion, or inducement. These staff determined to work with the respondent based on their autonomous judgement and free wills. Therefore, this part of the complaint shall be a general issue concerning the prohibition of business strife and labour contract disputes after resignation, which is not governed by the provisions of the Fair Trade Law. (2) With regard to the allegation that some of the complainant's clients traded with the respondent, it was found that such clients did not hand over their businesses to the respondent by being deceived, misled, coerced, or induced. It was also found that the complainant was unable to continuously provide public relations consulting services after April 18, 2002, due to the resignation of most of its employees. Thus, after considering the cost of entrusting another public relations company on the market, cooperative customs, and trust, the said clients decided on the most suitable cooperative partner according to their autonomous judgement and free wills in order to gain the grandest profits and lower the risks for themselves. This shall accord with the general trading habits and normal business practices, and shall not be a violation of Article 19 (iii) of the Fair Trade Law.  (3) With regard to the allegation that the respondent improperly acquired the information concerning client contracts and the contents of employee design from the complainant, it was found that Chen naturally obtained the relevant knowledge of the said information when operating the business as the complainant's general manager. The acquisition was not done "by coercion, inducement or other improper means" as prescribed in Article 19(v) of the Fair Trade Law. It was also found that the aforesaid information did not comply with the constitutions of "secrecy" and "economic value" prescribed in Article 19(v) of the Fair Trade Law. Finally, it was evidenced that the complainant did not take any reasonable secrecy measures or sign any confidentiality contract with its important cadres regarding the resignation and the contract materials that shall be returned thereafter. Therefore, according to the evidences presented, it was difficult to say that the respondent violated Article 19(v) of the Fair Trade Law.  (4) With regard to whether the respondent's conducts violated Article 24 of the Fair trade Law, the fact that the respondent obtained competitiveness from the complainant's staff, who transferred to work with the respondent, was a market competition result caused by the free flowing of labour force. The respondent did not violate Article 24 of the Fair Trade Law.
3.	In accordance with the evidences gathered during the investigation, there was no violation of the Fair Trade Law in this case. However, Chen did inform the complainant's clients via E-mail that "our account 'ecompr'will become invalid after tomorrow" when still serving as the complainant's general manager. The word "invalid" used therein did not clearly disclose the information regarding the resignations of the employees, inconsistent with the general business competition ethics. Secondly, it was found that the respondent was mainly established by Chen. While still serving as the complainant's general manager, Chen already intended to strive for the complainant's clients to trade with the respondent. Such a behavior shall be criticized for the violation of business ethics. In the light of the controversy of the respondent's acts in question, the Commission warned the respondent not to behave in similar way in the future, so that the violation of the Fair Trade Law may be avoided.

Summarized by Liang, Ya-Chin;

Supervised by Tai, Pei-Yi

Appendix:

None