Labor Dispute (Tel Aviv) 51261-02-23 Avner Dayanim – Champions Trading Group Ltd. - part 6

Attorney Katan:     What, what do you do with suits that are already old,

The witness, Mr. Crankors:   I sell them,

Attorney Katan:     That they have no demand? Who do you sell them to?

The witness, Mr. Crankors:   All sorts of things.  Those who can lower the price, mow the price and the fund price sell them for all kinds.  I'm not going to go into detail right now because they're here, what is my method of selling them.

(p.  39 of P.A.)

32. It was not proven by the plaintiff that the old suits were donated, as he claimed, to the "Mifalot Education and Society" association for children with disabilities.

Breach of trust while the defendant is employed

33. After the plaintiff was fired, it was discovered that the plaintiff had sold products while he was an employee that had not been sold to that customer by the defendant at all. A customer named 'Sport Hill in Givat Shmuel' sent a voice message to the plaintiff's old phone number in which he said: "'Come and take the scarves you brought me' and attached a photograph of the product (paragraph 23 of the defendant's manager's affidavit).  These scarves were not marketed by the defendant.
34. Moreover, the defendant's manager attached copies of messages he received from his customers regarding the sale of pills by the plaintiff to his customers independently and for a third party (Appendix "D" to the defendant's affidavit).
35. If so, it is clear that the plaintiff sold products of another supplier while he was an employee of the defendant.
36. After the defendant received the notices from the customers that the plaintiff was selling pills for a competing company, the defendant's manager held a clarification conversation with the plaintiff in March 2022, during which he instructed the plaintiff to stop selling products for a competing company (paragraph 18 of the affidavit to the defendant). The plaintiff promised to stop, but broke his promise.
37. At that time, the plaintiff was aware of the allegations against him. The defendant presented a copy of a WhatsApp message from the plaintiff, in which he asked the defendant's manager, "Why are you looking for me in the stores, I have already told you that I sell suits only for yours" (Appendix "F" to the affidavit of the defendant's manager).
38. Moreover, testimony was brought that the plaintiff presented a catalogue of Defendant 2 to Danny Chen in July 2022, while he was working for the defendant. Danny Chen is the former co-owner of "Netanya Toy Box", which purchases merchandise from the defendant through the plaintiff.  It turned out that the plaintiff sent Chen catalogs of other goods, sold him pills for J&K and collected payments for it.  The plaintiff offered him to purchase suits similar to those marketed on behalf of the defendant under the FIFA brand, and claimed that they sold well in other stores.  Chen testified that he did not know that this activity was being carried out without the defendant's knowledge.
39. Moreover, the defendant presented copies of correspondence with the owner of the "Idan 2000" company, describing the plaintiff's activity on behalf of J&K (paragraph 49 and Appendix "J" to the defendant's affidavit). The wording of the notices indicates that the relationship between the property and the plaintiff was created even before he began working for the counter-defendant.
    The defendant also attached details of calls from the plaintiff's phone, showing dozens of outgoing calls to Yoad K.  Yadron and Arik over the course of a year (Appendix "XI" - paragraph 51 of the defendant's affidavit).  However, this detail was given without a judicial order and without the plaintiff's permission, and therefore we do not attribute weight to it.
40. Besserglik, the witness on behalf of the defendant, presented a WhatsApp message in which the plaintiff wrote to him that he was disappointed in him ("I'm disappointed in you", "You're not okay", "I asked you to be discreet") because he forwarded invoices to the defendant that the plaintiff issued to Besserglik G&K while he was working for the defendant (3/2022) (Appendix 1 to Besserglik's affidavit).
41. There was trust in the plaintiff. The defendant relied on the plaintiff as testified by the defendant's manager.  The plaintiff exceeded the defendant's faith.
42. The plaintiff began working for J&K while he was still an employee of the defendant, using his connections and the knowledge he had acquired. Evidence was presented (WhatsApp messages) of contacting the defendant's customers and offering competing products.
43. The defendant proved through WhatsApp correspondence that the plaintiff had sold the defendant's merchandise

The plaintiff claimed that he knew all of the defendant's customers and that he had been in the industry for 20 years (p.  2 of the minutes of the injunction in file 37149-02-23, lines 13-16), but his familiarity with the customers does not permit him to contact them and sell goods outside the framework of his work for the defendant.

44. Therefore, in light of this evidence, we determine that the plaintiff took products from the defendant without permission and sold them. The plaintiff supplied goods of the defendant and the counter-defendant to the stores while he was an employee of the defendant.
    In view of all the evidence presented, and in particular the documented acts of theft ( section 31), the competitive activity and the breach of the duty of trust while the defendant was employed ( sections 36-42 ), we determine that the plaintiff committed acts contrary to the law that constitute serious disciplinary violations.  These acts justify the complete denial of severance pay and the passage of prior notice, in accordance with Section 16 of the Severance Pay Law, 5723-1963.
45. The claim for compensation for unlawful dismissal is dismissed, in view of the plaintiff's justified dismissal and the lawful dismissal proceeding.

Theft of trade secrets and breach of trust (counterclaim)

46. The counter-defendant claims that the plaintiff stole trade secrets (customer list, pricing methods, method of sale, and payment terms) and breached the duty of trust. The plaintiff denies this and claims that there is no trade secret, and that the list of customers is visible.
47. The defendant proved that the plaintiff contacted its customers. The defendant attached screenshots of WhatsApp correspondence with the defendant's customers both during and after his employment, from which it appears that the plaintiff offers and sells goods of defendant 2, in a competitive manner to the goods that the defendant sells (Appendix "G" to the defendant's affidavit, paragraph 45 of the defendant's affidavit).  Thus, for example, with "Kinin Menachem 2000 Idan" and correspondence with "Tom" (Appendix "G" to the defendant's affidavit).
48. The defendant presented screenshots of messages and transcripts of conversations with various customers, describing inquiries and the sale of goods by the plaintiff (Appendix "I" to the defendant's affidavit) (paragraph 48 of the defendant's affidavit).
49. In Besserglik, the witness on behalf of the defendant, testified that he had received a WhatsApp message in which it was written, "This is my new number" (Appendix "B" to B's affidavit). From the plaintiff in which the plaintiff gave him his number with an illustration of a soccer ball and testified that the plaintiff continued to sell them balls and contacted them even after he was fired (paragraph 12 of Moshe Besserglik's affidavit).
50. In summary, the documents indicate that the plaintiff sent WhatsApp messages to the defendant's customers, both for the purpose of updating a phone number and for the purpose of offering and selling goods.

Upon the commencement of the engagement between the plaintiff and the defendant, the parties did not sign an employment agreement, and there is no obligation by the plaintiff to secrecy after the termination of his employment, and there is no stipulation regarding the restriction of the plaintiff's freedom of occupation after the termination of his employment.  However, according to the case law, even in the absence of an explicit clause in the employment contract, it is necessary to check whether the employee has breached the duty of good faith and discovered a trade secret of his employer.  If so, this conduct constitutes a breach of the duty of loyalty to the previous employer:
"As stated in other municipal requests 312/74 ...  This is also in line with the case law in England and the United States, which was mentioned in the arguments of counsel for the parties: a clear distinction must be made between the employee's duty to safeguard professional secrets and confidential knowledge of the employer and the restriction of the employee's freedom of occupation after his retirement from employment with that employer.  The judge goes on to say that the secret knowledge (professional secrets) is something that the employee is not entitled to use or disclose to another "at any time, whether he has explicitly committed to it or not.  This obligation to keep a secret is an absolute duty and is an implicit condition that stems from the very relationship between the employee and the employer." I respectfully agree with these words, and these things are also in accordance with the case law in England and the United States." [Civil Appeal 155/80 Rav Bariach in Tax Appeal v.  Avraham Amgar, 35(1) 817 (1980)]

51. It has not been proven that the defendant has a trade secret. This is commercial competition.  The defendant supplies products to sports stores.  It has not been proven that it has exclusivity with customers to whom it is the only one to whom it is familiar, as emerged from the plaintiff's testimony:

I can say that I've been in the industry for 20 years and I know all the customers before Eitan, I went in and introduced him to all the customers, he didn't know anything, 99% of the customers don't know who Eitan is." (p.  2, lines 9-16 of the minutes of the injunction).