(Check Point matter).
- In the framework of her lawsuit, the plaintiff claims, inter alia, that Avi acted behind her back, and in parallel with his work for the plaintiff, acted to "extract" the confidential information that he knew as a senior manager in the plaintiff and as an employee in contact with the plaintiff's customers, in order to transfer the confidential information to Iris Marketing, in order to "appropriate" all these transactions and/or customers for themselves instead of passing them through and through the plaintiff...". (Section 76 of the amended statement of claim).
- The plaintiff further claims that Avi and Amir, in the framework of their roles as senior sales managers and agents in the plaintiff and who were in exclusive contact with the plaintiff's customers, received information that gave the plaintiff and them a commercial advantage over any other supplier or entity in the market. It was claimed that the confidential information stemmed from the warm relationship that existed between the plaintiff and the senior managers of the plaintiff's clients, to whom Avi and Amir were exposed in the course of their duties for and on behalf of the plaintiff. This was information that was not accessible; the contact with the plaintiff's customers was obtained by her after many years of effort and investment, when it was not accessible to the public; Avi and Amir requested that the confidential information be transferred to Iris Marketing and/or Yaakov so that they would benefit from this information, at the plaintiff's expense and without any effort on their part.
- According to the plaintiff's approach, Avi and Amir placed themselves in a situation of conflict of interest between their fiduciary duty to the plaintiff and their desire to enjoy and appropriate for themselves all or most of the plaintiff's customers in the field of corona products and the transactions with these customers. According to her, they did so by cynical and severe use of confidential information that was brought to their attention regarding the needs of the plaintiff's customers and the prices they are willing to pay for products, and placed themselves in conflict of interest with their role and duty of loyalty and good faith by entering into transactions or preventing the plaintiff from making transactions that they themselves carried out through and through Iris Marketing.
- On the other hand, according to the defendants, Iris Marketing and Yaakov saved the plaintiff during the Corona period and brought her huge profits, all this until Tsafrir decided that he was no longer interested in dealing with protective equipment (gloves), and in accordance with his aforementioned decision, the plaintiff stopped handling offers for such equipment. It was further claimed that Avi and Amir did not transfer any confidential information of the plaintiff to Iris Marketing and Yaakov, since the plaintiff never dealt with protective equipment (gloves). It was also claimed that they did not appropriate the plaintiff's transactions to Iris Marketing.
- A perusal of the documents in the case shows that the plaintiff did not point to a trade secret worthy of protection and made do with general statements that do not detail the nature of the trade secret that was transferred as claimed. No evidentiary basis was laid indicating that Avi or Amir had a unique authorization for information that is at the core of the plaintiff's activity - including work methods, business insights, unique prices or payment terms unique to the plaintiff's customers. It was not proven, therefore, that the information in their possession had any real value as required by law and case law. The plaintiff chose not to submit data that constituted a trade secret, even if only in a sealed envelope for the eyes of the court. The general arguments raised by the plaintiff are not sufficiently detailed in order for it to be possible to determine that they amount to a trade secret worthy of protection. In light of the above, our conclusion is that the plaintiff did not bring evidence to prove her claim of the existence of a trade secret.
- It should also be noted that the plaintiff did not even bother to indicate how she took precautions to protect the confidential information she wishes to protect. There is no claim by the plaintiff that the information that was in the possession of the plaintiffs was protected by permissions for folders and that it was known only to my father or Amir in the company. It should also be clarified that this is a new field that the plaintiff has entered (protective products such as gloves and masks, which were in great demand during the COVID-19 period), a fact that strengthens the conclusion that the plaintiff did not hold trade secrets in connection with this business.
Is the plaintiff entitled to compensation by virtue of the breach of fiduciary duty and good faith?
- It is a well-established and well-known rule that there is a relationship between an employee and an employer that goes beyond ordinary contractual relations, and therefore, they owe each other increased duties of trust and good faith, deriving from the provisions of section 39 of the Contracts Law (General Part), 5733-1973, by virtue of which the doctrine of good faith in civil law applies, and the norms for the fulfillment of obligations arising from a contract.
- The employment contract between the parties to it is based on the duty of loyalty, the duty of good faith and the duty of fairness that are rooted in the basis of the relationship between the parties, whether or not they are explicitly stated in the agreement (see High Court of Justice 1683/93 Yavin Plast in Tax Appeal et al. The National Labor Court in Jerusalem et al., IsrSC 47((4) 702). Accordingly, the employee and the employer are subject to mutual obligations stemming from the relationship between the parties, which include, inter alia, the employee's prohibition on competing with his employer while protecting the employer's commercial interests and conducting himself with integrity and fairness, while the duty of trust that an employee owes to his employer imposes more stringent norms of conduct than the ordinary duty deriving from the performance of a good faith contract. It was also held that the duty of trust also includes avoiding situations of conflict of interest between primary work and private additional work (see Civil Servants Disciplinary Appeal 6529/03 Kliger v. Civil Service Commission, IsrSC 58 (1) 734).
In the matter of Civil Appeal 189/03 Girit in Tax Appeal - Aviv et al., PDA 39 728, S. 742 (December 18, 2003), the National Court ruled as follows: