Employee Poaching and Misappropriation of Trade Secrets: A Comprehensive Judgment by the Court of Turin

A recent ruling (No. 1481/2025 of 26 March 2025) by the Turin IP Court on employee poaching and misappropriation of trade secrets offers a valuable overview of the “state of the art” of Italian case law on these matters.

The facts

The plaintiff was a company based in the Piedmont area specialising in the packaging and marketing of food products, sold “door-to-door” or by phone through a network of sales agents.

Each sales agent operated in a specific province and had their own customer portfolio, which they accessed on a dedicated company app through a personal, password-protected, account. The customer information contained in the database included, among other things, order history, applied prices, types of purchases, preferences, any intolerances and preferred payment methods. All sales agents, upon hiring, signed a two-year non-compete agreement.

The plaintiff stated that, within the span of a few months, about one-fifth of its sales agents in Northern Italy had left the company to join the defendant’s organisation, a direct competitor, which was in breach of the non-compete agreement. The sales agents had commenced selling on behalf of the competitor, the same products they previously sold for the plaintiff, in the same geographical area and to the same customers. The defendant, although formally warned by a cease-and-desist letter, not only had failed to put a stop to these activities but had continued to actively poach agents from the plaintiff, some of whom had begun working for the latter even before resigning from the former, while still having access to the plaintiff’s customer database.

The plaintiff claimed that the defendant’s conduct had resulted in unfair competition and misappropriation of trade secrets and sought appropriate injunction relief and damages.

The defendant countered that the reason for the exodus of a significant number of sales agents to its organisation lay in personal and professional dissatisfaction; that in no event could it be held responsible for actions independently taken by free agents; and that there was no evidence of any scheme intended to destabilise the competing business, nor of any misappropriation of trade secrets.

The reasoning

The Court of Turin fully upheld the plaintiff’s claims.

Unfair competition by way of employee poaching, the Court noted, requires i) the agent’s awareness of the act’s potential to harm another business and ii) the animus nocendi, meaning the intent to cause such harm, which has to be presumed “whenever the poaching is carried out in such a manner that it cannot be justified, with respect to principles of professional fairness, unless one assumes the author intended to damage the organisation and production structure of the competitor.”

The judges observed that intent can be inferred presumptively from several circumstances, such as the number of individuals poached, the roles held by the poached employees in their former company, the degree of their replaceability, the timeframe of the poaching and any lack of notice thereof, the inducement to breach any non-compete clause and, more generally, the concomitant use of unfair means, such as misappropriation of confidential information.

The evidence on file supported the case in the Court’s view. In particular, documents, written statements, and testimonies obtained during the trial confirmed that numerous plaintiff’s customers had been contacted by its former agents at around the same time of their transfer to the competitor; it was also established that the defendant’s door-to-door sales in Northern Italy had intensified during the same period, resulting in a significant increase in profits and in a corresponding decrease in the plaintiff's business.

These circumstances, along with the poaching of several former agents during a limited period of time, the breach by the latter of a non-compete agreement and the misappropriation of trade secrets (see below) were all considered consistent indicators of unfair competition.

As to the argument that the defendant should not answer for the conduct of free agents, the judges rebutted it by noting that under Art. 2598 no. 3 of the Italian Civil Code an enterprise may be held responsible for unfair competition practices which they are not directly engaged in whenever they are carried out by third parties in their interest, even in the absence of proof of a pact to that effect.

On the matter of misappropriation of trade secrets, the Court made a preliminary assessment on whether the customer information at the center of the plaintiff’s claims met the requirements to qualify as “trade secrets” under the Italian IP Code, namely: a) that it is not generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question; b) that it has commercial value because it is secret; c) that it has been subject to reasonable steps to keep it secret.

The Court found all the requirements to be satisfied. The judges observed that the type and granularity of the information contained in the plaintiff’s customer database possessed an “undeniable economic and commercial value, enabling the agent to accurately identify which products to offer to each customer and facilitating their loyalty”. The database itself was defined as “capable of providing a competitive advantage that transcends the skills and experience of the individual worker”.

In addition, the judges noted, the plaintiff had protected the information with both technical and legal security measures: access to the database was limited to owners of personal accounts  protected by private authentication credentials; each agent could only access information relating to customers in their own portfolio and there was no way of sharing such information other than taking screenshots (a circumstance that the Court denied was exculpatory, noting that “it cannot be expected for the company to continuously monitor its employees to prevent potential abuse”); access privileges were revoked at the end of the employment relationship; all agent agreements included a confidentiality clause specifically referring to customer information. The non-compete clause was also considered instrumental in protecting the same information by the Court.

In the Court’s view, there was also evidence that these trade secrets had been unlawfully exploited by the defendant. Specifically: i) a significant portion of the plaintiff’s former employees had started working for the defendant before even resigning, therefore while still retaining access to the customer database; ii) a great number of the plaintiff's former customers had been contacted by those agents; iii) it was entirely implausible that the agents could retain by memory names, contact details, preferences and other data of all the customers in their portfolio (each agent handled an average of 600–700 customers).

The remedies granted

The IP Court of Turin enjoined the defendant company: i) from further using the services of the poached agents until the expiration of the respective non-compete agreements; ii) from disclosing to third parties or further using the defendant’s trade secrets concerning its customers’ information, setting a penalty of €1,000 for any breach of the order.

On damages, the Court found that  the unlawful exploitation by the defendant of the skills, experience and information that its recruits had acquired during their tenure at the plaintiff’s organisation had allowed the defendant to obtain an unfair competitive advantage by saving the time and resources needed to train a sales network, acquire clients independently and properly start its own door-to-door sales activities; conversely, such activity unfairly undermined or at least compromised the plaintiff's efforts in training its agents and building its customer database.

On these grounds, the Court ordered the defendant to compensate the plaintiff for the damages suffered as an immediate and direct result of the former’s conduct, calculated at approximately €438,000, covering loss of profits due to documented turnover loss, depreciation of the customer portfolio and expenses required to rebuild the sales network, and to pay legal fees.

Lastly, the Court ordered the publication of the judgment on the homepage of the defendant’s website for six consecutive months.

Remarks

The above ruling is further proof of the usefulness of fostering a culture of trade secret protection in Italian companies.

Valuable information that is not eligible for patent protection, or that the company strategically decides not to patent (considering the limited duration of patent exclusivity to be less advantageous than the potentially unlimited duration of secrecy) should be protected through adequate technical and legal measures.

These measures are not only inherently effective in protecting trade secrets but, equally important, from a legal standpoint they constitute one of the prerequisites for invoking the protection afforded by the Industrial Property Code. From this perspective, it is essential that such measures are adopted proactively and by default.