Tina Viney | CEO of APAN – Aesthetics Practitioners Advisory Network
Dear members and friends,
THE ISSUE OF DATABASE THEFT IN THE AESTHETICS INDUSTRY CONTINUES
I am concerned with the level of theft instigated by staff members that salons and clinics are reporting in the workplace is constantly increasing. The interesting thing is that statistically-speaking theft doesn’t usually happen straight away, but can manifest after several years of employment and so I want to discuss this with you again. Whether you have experienced theft in your business or not, it is worthwhile taking appropriate measures because these incidents are on the rise.
In the Spring issue of APJ Journal which will be out in a few weeks, we addressed this issue and presented strategies you can put in place to prevent this from happening to you. We also have a very thorough HR Agreement document for businesses to access from APAN that also includes a Theft Policy. This document should be given to every staff member and it should be signed. A copy should be given to the staff member and one kept in your business files. If you don’t have an HR Agreement in place you can purchase the template from APAN.
The question everyone is asking is “if a staff member violates this agreement can I take them to court and how is the loss and compensation to my business estimated?”
When a matter is taken to court the legal system usually looks for any existing precedent of a similar case, in order to consider past outcomes as a reference. The precedent has now been set with an interesting case of client theft in South Australia.
Below is a brief extract of the report, which also featured in the spring issue of APJ Journal.
RIVAL BUSINESS ORDERED TO PAY $750,000 IN COMPENSATION FOR CLIENT DATABASE THEFT
Harris Real Estate and one of its agents have agreed to pay Toop Real Estate $750,000 after the prominent Adelaide Hills agent used confidential files in breach of her contract and lured clients to Harris.
Former Toop employee Arabella Hooper accepted she breached her contract by improperly using 230 of Toop’s confidential files and several hundred pages of client contact details when she left the agency in 2015.
The settlement, executed in the District Court last month says Hooper used the files to develop business with rival agency Harris Real Estate, where she is currently employed. Hooper ended her employment at Toop in June 2015 after disciplinary action was taken against her.
At an earlier District Court hearing, Toop sales and marketing CEO Genevieve Toop alleged that Hooper had “cracked” during a meeting at the agency’s Norwood offices in May 2015 when she realised the disciplinary action would make her ineligible for the company’s annual awards.
Hooper ended her seven-year employment at Toop on June 29, 2015, and commenced employment with Harris Real Estate the following day.
The settlement said Hooper executed seven sales agency agreements on behalf of Harris Real Estate, while still employed at Toop and altered at least 13 client records in Toop’s customer database by downgrading recorded interest levels of those clients from “hot” or “warm” to “cold”.
Hooper agreed she had printed data of more than 240 clients in Toop’s customer database with the intention of using the data to benefit Harris Real Estate and had solicited work from 15 people who had done business with Toop.
Hooper also accepted that she had enticed another employee of Toop to resign from the agency and take up employment with Harris Real Estate.
Toop’s lawyers had argued Hooper’s actions resulted in close to $30 million in property sales, which would have earned the Toop business commissions of more than $237,000.
Both Hooper and second defendant Harris Real Estate were today ordered by Auxiliary Judge Clayton to pay Toop Real Estate $750,000, which includes interest and costs, within 21 days.
ESTABLISHING A PRECEDENT
The significance of this case is that legally it is setting a precedent, or rule by which similar cases or circumstances in other industries, such as the beauty industry can be guided, making a strong case to take a similar course of action against database theft by employees, as well as luring staff to leave the business and follow them.
Similar circumstances are not uncommon in our industry. Being a service-based industry where employees have a personal relationship with clients, it is not uncommon when they choose to leave to also take copies of the database and move to another business, while attempting to lure the clients to the new business.
APAN urges all business owners to ensure a clear policy on database ownership and what constitutes theft is spelt out in their staff HR Policy document and to get each staff member to sign off on this with a clear understanding of what the consequences will be if this agreement is violated. We have the appropriate documentation to protect businesses from such painful experiences.
If you don’t have a comprehensive HR Policies document in place your business is at risk. Please contact APAN for further assistance Ph: 07 5593 0360 or email email@example.com.