Dubai court dismisses company’s AED5m claim against former employee

The Dubai Civil Court of First Instance has rejected a lawsuit filed by a company against a former employee, in which it sought AED5 million in compensation. The company accused the employee of using offensive language at work, disclosing trade secrets, damaging its reputation and stealing clients. However, the court found that the company failed to provide sufficient evidence to support its claims. It also noted that the company did not pay the expert fee ordered to examine the technical and accounting aspects of the case. According to the claim, the former employee had signed a confidentiality agreement undertaking not to disclose the company’s secrets. His employment contract also included a clause preventing him from working for competing clients or contacting the company’s clients for one year after the end of his employment. The company stated that the employee worked for it for two years before his services were terminated at his request. It alleged that, during his employment, he committed professional violations, including using offensive language when dealing with colleagues and clients. According to the lawsuit documents, the company said this caused financial losses and damaged its business reputation. The company further claimed that it was later forced to accept job offers with lower profit margins because the former employee had disclosed confidential information and trade secrets. It also accused him of launching a website containing details of its organisational structure and pricing models, which it said had been developed specifically for its business. The company argued that this constituted a breach of his confidentiality obligations. The lawsuit also alleged that the former employee harmed the company and its owner by filing a case in a foreign court. The company described this as an attempt to harass, defame and damage its reputation. The company requested that the court order the former employee to pay AED5 million in compensation. This included AED3 million for material and moral damages, losses and costs that it said resulted from the disclosure of secrets, violation of privacy and defamation. It also sought Dh2 million for reputational damage, in addition to legal interest, fees and expenses. The court said it had decided to appoint a committee consisting of an accounting expert and an information technology specialist. The committee was tasked with examining the nature of the relationship between the two parties, assessing the former employee’s access to customer, product and pricing information, and verifying the nature of the website’s activities. It was also asked to determine whether there had been unfair competition, disclosure of confidential information or client poaching. The experts were further instructed to verify the company’s claims regarding the employee’s alleged use of offensive language when dealing with clients. They were also asked to examine whether he had breached the confidentiality clause when preparing job offers, whether the reduction in profit margins was linked to the disclosure of confidential information, and the extent and value of any proven damages. However, the company did not pay the AED30,000 expert deposit despite being granted time to do so. It also failed to provide reasons accepted by the court for not making the payment. As a result, the court ruled that its right to rely on the preliminary judgment appointing the experts had lapsed, in accordance with Article 112 of the Evidence Law. The court stressed that compensation can only be awarded if fault, damage and a causal link between them are proven. It noted that the burden of proof rests with the plaintiff. The court added that the case file did not contain sufficient evidence to establish unfair competition, disclosure of secrets or client poaching. It also noted that examining such matters required expert assessment, which the company did not complete. The court ultimately concluded that the company had failed to prove its entitlement to compensation. It therefore ruled that its right to rely on the preliminary judgment had lapsed, dismissed the case in its current form, and ordered the company to pay the fees, expenses and attorney’s fees.