When a Departing Employee Takes Your Trade Secrets in Korea: Injunctions, Criminal Complaints, and Damages

For foreign companies operating in Korea, one of the most damaging events is a key employee resigning and joining a competitor, or starting one, with the company’s customer lists, pricing, source code, or technical data. Korean law offers strong remedies. The Unfair Competition Prevention and Trade Secret Protection Act provides injunctions, enhanced damages, and criminal penalties, and the Criminal Act adds breach-of-trust liability. These remedies work best when the company acts quickly and in the right order. This article explains what qualifies for protection, which remedies are available, and how to combine them.

1. What Counts as a Trade Secret in Korea

Under the Unfair Competition Prevention and Trade Secret Protection Act, information qualifies as a trade secret if it meets three requirements:

• Not publicly known. The information is not generally available or easily obtainable from public sources.
• Independent economic value. Holding the information gives the company a competitive advantage.
• Maintained as a secret. The company has actually managed the information as confidential.

Before a 2019 amendment, the company had to show “considerable efforts” to keep the information secret. The current standard only requires that it was managed as a secret, but courts still look closely at the evidence. Relevant factors include:

• access restrictions and passwords
• confidentiality markings
• confidentiality undertakings signed by employees
• security policies and training
• logging of downloads and transfers

Courts have refused protection where valuable information was freely shared within the company without controls.

Key takeaway: Protection depends as much on how you managed the information as on its value. Weak controls are the most common reason claims fail.

2. Protection Without a Trade Secret: Breach of Trust

Even where information does not meet the trade-secret test, Korean courts have recognized criminal liability for occupational breach of trust under the Criminal Act. This applies where an employee, in violation of their duties, removes or fails to return the company’s “major business assets” when leaving. Examples include material that is not publicly available, cost the company significant time or money to create, and would give a competitor an advantage.

Timing matters. The Supreme Court has held that the offense is generally complete when the employee takes or fails to return the material while still employed. Use of the material after resignation may not itself be breach of trust, because the former employee no longer handles the company’s affairs. Evidence of what was taken before departure is therefore critical.

3. The First 72 Hours: Preserving Evidence

Most trade-secret cases are won or lost on evidence gathered in the first days.

• Secure the employee’s devices and accounts. Take forensic images of the company laptop, phone, and cloud accounts before they are reassigned or wiped.
• Collect logs. Preserve email, file-server, cloud storage, USB, and printing logs for the months before departure. Large downloads, transfers to personal email, and uploads to personal cloud storage are the most common evidence.
• Document the information. Identify exactly which files or data were taken and why they qualify as trade secrets or major business assets.
• Prove when you held it. Korea’s trade-secret original certification service records an electronic fingerprint of documents. A registered certificate creates a presumption that the company held the information at that time.
• Review the employee’s agreements. Check confidentiality undertakings, non-compete clauses, and exit certifications.
• Avoid self-help. Do not access the employee’s personal accounts or devices without consent. Doing so can create criminal liability for the company and make the evidence inadmissible.

4. Civil Remedies: Injunctions

The fastest civil remedy is a preliminary injunction under the Unfair Competition Prevention and Trade Secret Protection Act. The company can ask the court to:

• prohibit the former employee and the new employer from using or disclosing the trade secrets
• order the return or destruction of the materials
• in appropriate cases, prohibit the employee from working for a competitor in a related role for a limited period

Procedure:

• Hearing. Because these injunctions affect the employee’s livelihood, courts usually hold a hearing. Decisions typically take several weeks to a few months.
• Showing required. The company must show a prima facie case of infringement and urgency.
• Security. The court may require security.

Duration. Courts usually limit prohibition periods to the time a competitor would need to develop the information independently, often one to two years from departure. A company that waits months before applying weakens its argument for urgency.

Even without an agreement. The Supreme Court has recognized that a court may prohibit a former employee from working for a competitor, where necessary to protect trade secrets, even if the employee did not sign a non-compete agreement.

5. Non-Compete Agreements and Their Limits

Non-compete agreements are enforceable in Korea, but only within limits. The Supreme Court assesses their validity by weighing:

• whether the employer has a legitimate interest worth protecting, such as trade secrets or key customer relationships
• the employee’s position and access to sensitive information
• the duration, geographic scope, and types of work restricted
• whether the employee received compensation for the restriction
• the circumstances of the departure
• the public interest

Restrictions of one year or less, limited to directly competing work, are more likely to be upheld. Agreements without any compensation, or covering all industries indefinitely, are often reduced or invalidated. A head-office standard non-compete clause should be reviewed against these factors before being used in Korea.

6. Damages

• Actual loss. The company can claim damages for its losses. The Act includes presumptions that ease proof, based on the infringer’s profits or the volume of infringing sales.
• Enhanced damages. For willful infringement, courts may award up to five times the proven damages. This cap was raised from three times with effect from August 21, 2024.
• New employer. Where the competitor knew or should have known that it was receiving misappropriated trade secrets, it can be liable alongside the former employee.

7. Criminal Remedies

Trade-secret misappropriation is a crime under the Unfair Competition Prevention and Trade Secret Protection Act. The company does not need to file a criminal complaint within a short window, because a complaint is not a prerequisite to prosecution.

• Penalties. Domestic misappropriation can be punished by imprisonment of up to 10 years or a fine of up to KRW 500 million. Use or disclosure abroad, or knowing use for a foreign purpose, can be punished by up to 15 years or a fine of up to KRW 1.5 billion. Where the gain is large, the fine can be calculated as a multiple of it.
• Damaging trade secrets. Since the 2024 amendment, damaging, deleting, or altering trade secrets without authorization, including through hacking, is also an offense.
• Corporate liability. A company whose employee commits the offense in the course of its business, including the competitor that hired the former employee, can be fined up to three times the individual fine, unless it shows that it exercised proper supervision.
• Related offenses. These include occupational breach of trust and, for designated national core technologies, the stricter penalties under the Industrial Technology Protection Act.
• Investigating authorities. Criminal complaints can be filed with the police or prosecutors. The Korean Intellectual Property Office’s technology police unit also investigates trade-secret cases.

The main practical advantage of a criminal complaint is that investigators can search and seize the former employee’s personal devices and the new employer’s systems. A private company cannot do this itself. The investigation file can later support the civil claim.

8. Civil or Criminal First?

Situation	Recommended first step	Reason
Strong internal evidence of what was taken; need to stop use quickly	Preliminary injunction	Fastest way to halt use and disclosure
Evidence is on the employee’s personal devices or the competitor’s systems	Criminal complaint	Search and seizure is available only through investigators
Material taken abroad, or a foreign competitor is involved	Criminal complaint, plus injunction in Korea	Heavier penalties for overseas leaks; urgency
Information may not qualify as a trade secret	Breach-of-trust complaint, plus non-compete injunction if an agreement exists	Alternative grounds for protection
Loss is quantifiable after use has stopped	Damages claim	Recovery, including enhanced damages for willful conduct

In many cases, the company files a criminal complaint and an injunction application in parallel. A demand letter to the former employee and the new employer can also prompt a settlement involving return of materials and undertakings. However, a demand letter warns the other side, so it should come after evidence has been secured.

9. Prevention: What to Put in Place Now

• Classify confidential information. Restrict access on a need-to-know basis and mark documents as confidential.
• Signed undertakings. Obtain confidentiality undertakings at hiring, at promotion to sensitive roles, and at departure.
• Targeted non-competes. Use non-compete clauses limited in time and scope, with compensation for key employees.
• Monitoring. Introduce data-loss prevention and logging tools, with notice to employees that complies with Korean privacy law.
• Exit procedures. Interview departing employees, return devices, revoke access promptly, and have them certify that all materials have been returned.
• Original certification. Register key documents with the trade-secret original certification service.

10. Conclusion

Korean law protects trade secrets with both civil and criminal tools. Their effectiveness depends on the company’s preparation and speed. The company must be able to show that the information was managed as a secret. It must preserve evidence of what the employee took before leaving, and it must act before the information is absorbed into a competitor’s business. A coordinated approach is usually the most effective:

• a criminal complaint to obtain evidence
• a preliminary injunction to stop use
• a damages claim to recover losses

Key takeaway: Treat a suspicious departure as an emergency. Secure the evidence first, then use the criminal and civil procedures together.