About two years ago while interning at Siemens AG in the transformers business unit, a major problem broke out when audit reports found out that the steel scraps were being unaccounted for. After a thorough investigation it was found that steel scraps were being sold in the black market without passing though the accounting procedure for selling scraps. When this matter was found in the audit reports, the management of the business unit was notified to debrief the people involved in the selling of scraps.
The investigation process yielded that the unethical selling of steel scraps were a combined effort of the selling staff and a retired worker at the factory who had found a way to dispose the material. This unethical behavior to allow a discharged worker to continue working along with the illegal action of selling scraps without company knowledge was completely against the rules and policies strictly enforced by the company.
As a result the whole selling department was revamped with previous employees shifted to other positions. The workers who had committed the crime were severely reprimanded with instant termination and law suit against the person that landed the guilty workers to a 10 years imprisonment. The incident made the company aware that trusting the employees is a difficult matter can only be fully trusted when regular checks and balances are in place.
After this incident, the company contracted a local security agency for close circuit cameras to be installed on all important location and also started issuing ID cards with special coding to prevent outsiders to enter the factory premises on false pretenses. Scenario 2: Another incident that took place was at the pharmaceutical company in June 2008. The company was trying and developing new products like its policy is to continuously develop new products. A researcher, who was working on a product class C, got an extremely good job offer from a competing organization and after a 2 months period, left the organization.
Without an agreement of not to share proprietary information with the competitors or an agreement not to work for a direct competitor, the person was able to replicate the exact same formula of product class C in the new company which came out with the product much quicker and hence was able to gain a huge market share. My company who suffered firstly from the loss of an experienced researcher and then the loss of market share wanted to take the research to court. However, without any breach of agreements, the company decided to forgo any legal action.
From this incident the company who once thought that I didn’t need any intellectual property rights agreement, went on to build a number of agreements that protected its assets and its secret information. One was to have all employees sign a contract an agreement that would not allow then to work for direct competitors for atleast 4 months after they leave the job. The other agreement was to add a clause in the job description and responsibilities to safeguard the company’s secrets as priority one.