In a recent ruling, the Tel Aviv Regional Labor Court dismissed in its entirety a large-scale financial claim filed by the medical device company Agentek against a former employee. The lawsuit, amounting to 2. 7 million NIS, was filed after the employee ended her employment, established her own independent business, and began representing a supplier that had previously worked with Agentek. The legal dispute reached the court after an Agentek client notified the company of the termination of their contract, moving its business to the firm established by the former employee.
According to a report by TheMarker, Agentek claimed in its statement of claim that the employee carried out a series of well-planned actions intended to deceive her former employer. The company alleged that the employee actively solicited the client to terminate their business relationship and switch to her services. Legally, Agentek argued that these actions constituted the misappropriation of its trade secrets, alongside a flagrant breach of the duty of good faith owed by an employee to an employer, even after the termination of employment.
Conversely, and following a lengthy five-and-a-half-year legal proceeding, the Regional Labor Court determined that Agentek failed to prove its claims. The ruling stated that there is no real evidence of trade secret theft or a breach of the duty of good faith by the employee. The court rejected the company's narrative of a malicious scheme and ordered the dismissal of the entire claim. This decision emphasizes the limitations of an employer's ability to restrict the freedom of occupation of former employees, especially when it concerns the transfer of clients to the services of an employee who has gone independent, provided that this was not achieved through illicit means proven in court.