Labor Dispute (Tel Aviv) 55553-06-22 Guardianship.BC Technologies Ltd. – Coral Ghibli - part 2

FBC  Claims

7. According to the company, the employees who were exposed to valuable classified commercial information of the company worked behind their backs together and separately, while coaxing each other and acting in complete contravention of their obligations under the employment agreements, and moved one after the other, to work together at Medatech – a company that competes directly with the plaintiff.
8. In their actions, the employees violated the duty of confidentiality, stole trade secrets from the company, violated the duty of loyalty and the increased duty of good faith in employment relations, and violated employment agreements.

Workers' Claims

9. According to the employees, FBC's lawsuit is an attempt to conduct a "show trial" that is not intended to realize a legitimate interest it has in relation to the employees, but rather to convey a threatening message of the kind "so that they will be seen and seen" towards its existing employees so that they do not dare to move to work elsewhere.
10. The workers are young people at the beginning of their careers, most of whom were employed while still students, part-time, with low hourly wages, in junior positions, and for a short period. The employees did not breach any duty of confidentiality, duties of loyalty and good faith, did not solicit employees, and the non-compete clause in the employment agreements is illegal.

The Counterclaim

11. According to the employees, the internal work environment at FBC was characterized by great tension and often amounted to exploitation and abuse. Some of the employees were blatantly humiliated in front of their colleagues, when they were "reprimanded" in a forum of all employees; Some of them were treated with humiliation by the company's customers, and most of them were forced to work in a hostile work environment, under constant pressure and a continuous workload.  Later, the company also damaged the employees' good name, their reputation, and even tried to intimidate them and sabotage their new job.  Moreover, the company illegally deducted money from the salaries of the employees – Employees 1 and 2, on the grounds that this was a "fine" for returning their vehicles to the leasing company earlier than planned.
12. According to the company, the counterclaim was filed solely as a weight against the main claim, for the purpose of attacking the company's claims only, and there is nothing behind it. The employees' claims of abuse and defamation are baseless and the deduction from the salaries of employees 1 and 2 was done lawfully, since they resigned before the leasing contract was terminated.

The Proceedings in the Court

13. On May 2, 2023, a preliminary hearing was held, in which instructions were given regarding the preliminary proceedings and it was suggested that the parties turn to a mediation proceeding. Later, and when the parties did not settle their disputes by agreement, an order was issued for the submission of affidavits of the main witness.
14. FBC filed affidavits on behalf of Mr. Tal Frenkel, the Company's Chairman (hereinafter: " Frenkel"); Mr. Raz Saidi, VP Business Development and Strategic Projects (hereinafter: "Mr. Saidi"); Ms. Dalia Galili, Sales Manager (hereinafter: "Ms. Galili"); and Ms. Ashrat Arf, a priority implementer in the company (hereinafter: "Ms. Arf"). Each of the employees submitted an affidavit on his behalf.
15. On April 21, 2024, the testimonies of the witnesses on behalf of the company were heard, and on May 12, 2024, the testimonies of the employees were heard. At the end of the hearing, an order was issued for the submission of written summaries of arguments.  The last summaries were submitted on March 13, 2025.

Discussion and Decision

16. After carefully reviewing the pleadings and their appendices, hearing the parties' testimonies and carefully reading their summaries, we have reached the conclusion that the claim and the counterclaim should be dismissed in principle, except on a marginal issue as detailed below, and our reasons are detailed below.

Circumstances of the Employees' Termination of Work

17. The following is a table that summarizes the date of the start of the employees' employment at FBC, the date of its end, and the date of their employment at MedaTech:

18. From the above table, it is clear that there was no simultaneous departure of the employees from the company, and that there were gaps of up to 6 months[1] between the dates of the employees'
19. During the relevant period, the company had a turnover of many employees, and according to Mr. Frenkel's testimony, a total of 27 employees left their jobs[2].
20. Frenkel explained later in his testimony that during the relevant period, the company recruited a large number of employees, dozens according to him, and that the dropout of the company was natural[3]. Hence, the mere fact that the employees resigned from their jobs does not, in itself, indicate a planned and coordinated organization on their part, and certainly does not provide "prima facie" evidence of the existence of a collective intention to operate behind the back of FBC and "defect" from its services in favor of a competing company.
21. Frenkel claimed in his affidavit that the employees had formed contact groups between them to provide assistance and reinforcement from employees who had already left their jobs at the company and those who were considering leaving[4]. Beyond the fact that no support was presented for this claim, Mr. Frenkel's claims were contradicted by the FBC witness  – Ms. Arf.  According to Ms. Arf's affidavit, in January 2022, she received a direct request from Medatech through the "LinkedIn" platform, and not from any of the employees, she was offered to start a recruitment process with her, and was summoned for a professional interview with Ariel Algarbali - Operations Manager at Medatech[5].  Ms. Arf testified before us that she was offered by Madatech to work as an implementer and project manager[6], a  position similar to the one she served in the company.
22. Although Mr. Arf testified that Medatech referred her to Mr. Elhanati and Ms. Nash so that they could tell her "how good it is to work at Medatech,"[7] the initiative came from Medatech, and Mr. Elhanati and Ms. Nash were already working at Medatech at the time. Arf did not claim that they tried to coax her to pass, and it was not proven that there was such an attempt, not even by hint of it.
23. Arff testified that job offers from companies in this field through the LinkedIn platform are commonplace[8], employees in general, and she accepts invitations for such interviews as a routine thing in order to "check the market", and sometimes even as a tool for pressuring their employers to improve their working conditions[9].
24. Arf testified that it was difficult to refuse MediaTech's offer[10] – evidence of the recruitment efforts that MediaTech used on FBC employees. Medetech's recruitment efforts, not those of any of the defendants.
25. Elhanati also testified that he was contacted by Mediatec via LinkedIn [11] – reinforcing Ms. Arf's claim that the initiative to recruit the employees came from the competing company and not from any of the defendants.
26. Arf testified before us that she never spoke to anyone about her salary[12], and therefore, there is no basis for an automatic assumption that any of the employees passed on these details to Medatech.
27. Each of the employees stated his reason for resigning, which did not depend on any of the other employees. Their version on this matter was not contradicted, and was even supported by the testimonies of the witnesses on behalf of FBC, who testified that at least some of the employees had asked to resign from their jobs on various occasions in the past as well, and remained with the company only after they were persuaded to stay by improving conditions, etc.
28. Elhanati stated that due to the workload, working under constant pressure, due to the lack of sufficient professional support and feeling that he was not progressing professionally, and due to his dissatisfaction with the work, he decided to look for another job[13].
29. Nash testified in her affidavit that she went on maternity leave on 25 August 2021. Due to her desire to move to a place of work in the north near her place of residence and due to her desire to work flexible working hours, she decided at the end of her maternity leave to look for an alternative job in the north of the country, and as part of her search, she turned to her Meditech offices in Tirat Carmel, and was accepted[14].  She stated that she had shared with the company the terms and hours offered to her by MedTech, but the company was not willing to allow her to work for short days, so she decided to resign[15].
30. Yosef claimed that due to the heavy workload, the negative attitude he received from the company, and the lack of a professional address to accompany and assist in problems that arose, and the large turnover of employees and team leaders, he submitted a letter of resignation in December 2021[16]. There is no dispute that the company tried to persuade Mr. Yosef to stay, even offered to increase his salary, reduce the burden on him,[17] and even offered him an alternative position[18].  However, this did not persuade Mr. Yosef to stay at work.  Mr. Sa'idi testified that Mr. Yosef had asked to resign once or twice in the past before he announced his last resignation[19], he was raised in his salary, and he was kept until he finally agreed to his resignation[20].
31. Saidi testified that Ms. Karko had also asked to resign in the past before her last resignation[21].
32. Ghibli stated that due to the enormous workload involved in holding two positions, a project manager and a priority implementer, and the many overtime hours and due to her desire to focus on the field of implementation, due to the lack of sufficient professional support and due to her dissatisfaction with her work, she decided to look for another job[22].
33. Kahlon also stated that due to the accumulation of circumstances - a constant feeling of tension, pressure and burden, humiliation he experienced at work that was not addressed, lack of management, professional guidance and guidance, low wages, feelings of distance and disconnection, the desire to work reasonable hours in a pleasant and safe work environment, and the desire to develop professionally in a place where he would feel valued, he decided to look for an alternative job[23].
34. From all the evidence presented to us, we were therefore under the impression that, as a rule, it was Medetech that initiated the appeal to most of the employees, and Mr. Frenkel testified about this himself and clarified the motive it had for doing so[24]. From the testimonies of the employees that were not hidden, each of them had his own reason for terminating his work at Medatech, and the main ones were to improve their working conditions – a legitimate consideration in itself and it was not found that their considerations were tainted by bad faith.
35. We have not been presented with evidence that any of the employees worked to coax one of his colleagues to switch to Medatech, and FBC's claims in this regard remain only an unfounded hypothesis.

Confidentiality, Non-Competition and Non-Solicitation Clauses in Employment Agreements

36. As part of the employment agreements, the employees sign confidentiality, non-competition, and non-solicitation clauses, in a similar wording, which reads as follows[25]:

Confidentiality: At all times, whether during or after the termination of my employment, I will retain and hold all proprietary information, including but not limited to inventories, marketing plans, product plans, business strategies, financial information, forecasts, personnel information, and customer lists, with absolute confidentiality and fidelity, and I will not use or disclose any such proprietary information without the Company's prior written consent, except as may be necessary to perform my obligations as an employee of the Company and for the benefit of the Company.  Immediately upon termination of my employment by the Company, I will provide the Company with all documents and material of any kind, including, but not limited to, material on magnetic or electronic means, relating to my work in the Company, and I will not take with me any documents or material or the business from which all of them contain proprietary information."