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Shimon works for Business A, he has access to the contact information of all the clients and is responsible for interacting with them. Moreover, he knows how much each client is paying for Business A's products and services, as well.

Shimon leaves Business A and opens his own Business B that operates in the same field. Shimon wants to use all the information he collected on his former clients to attract those clients to his business.

Can this behavior be considered a"steal" Halachicly?
If yes, can he be sued in Beis Din and what can be the verdict?

  • This is pretty common practice in the realms of consulting, accounting, law, agency... really any professional service. Perhaps try looking into responsa to practitioners of these fields for guidance. – Charles Koppelman Nov 18 '14 at 20:41
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R. Asher Meir at the Business Ethics Center in Jerusalem, writing for Aish HaTorah, answers a similar question thus (excerpted):

The Mishna discusses a person who climbs a wild olive tree and starts shaking the ripe olives from the branches onto the ground below. Since the olive tree doesn't belong to anybody, the olives on the ground don't belong to him; yet the Mishna states that taking them is like stealing. The reason is that the person who climbed the tree invested effort in obtaining them. The ethical course of action is for the second person to make the effort to find another tree and take its olives. By the same token, for you to take your former employer's customer lists would be almost like stealing. You should invest your own independent efforts in cultivating customers who will be drawn to your superior service.

SOURCES: Mishna Gittin 5:8; Babylonian Talmud Kiddushin 59a, Bava Metzia 10a.

  • Interesting that he quotes the mishna as "is like stealing" and applies it to the case he's discussing as "almost like stealing" (emphasis supplied). Sounds like he's trying to avoid coming down with a p'sak. NTTAWWT. – msh210 Oct 27 '11 at 2:49
  • I suspect he was trying to avoid p'sak, yes. Many of the answers I've seen on the mailing list from which this came originally have that character. Probably not unlike our CYLOR push -- we can try to answer questions but nobody here is an authority for any questioner. But obviously I'm guessing. – Monica Cellio Oct 27 '11 at 3:31
  • "Almost like stealing" is a legal level of prohibition, i.e. not quite but almost stealing. This is the psak. No evasion here. – Barry Oct 28 '11 at 16:05
  • @Barry, I didn't know that. How do the consequences of "almost like stealing" compare to those for "stealing"? – Monica Cellio Oct 28 '11 at 20:30
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    This is a very different case! In the OP's case, these are clients that Shimon put effort into acquiring and has a relationship with. In the cited case, these are clients that Shimon effectively gets his pal Yitzhak to perform corporate espionage. – Charles Koppelman Nov 18 '14 at 20:38
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Let me just outline the answer, for now, I hope to bring the sources later:

We should distinguish between two types of businesses - open and closed. An Open Business is where a bystander can get all the information (for example a supermarket, the list of clients and products and services) just by watching from outside, a closed B. is one that keeps the information secret and it's hard to get it from outside.

In my answer, I only refer to the closed type of businesses.

  1. The list of clients is private property and is a subject for stealing. Just as if Shimon was taking a car or a PC with him.

  2. It's common to sign an ND (Non-Disclosure) agreement that includes "trade secrets" which include the clientele and other business details. If there was no NDA we assume there was a spoken one of a standard form. Therefore Shimon broke the agreement and can be sued.

  3. It is very common (based on the Mishnaic and Talmudic discussion of fair competition) to sign such an agreement that prohibits ex-employees to compete with the business for a certain period of time. So he can be also sued for competition.

  4. In the above cases, the Jewish court judges according to the local customs and Dina Demalchutah. So Shimon can be sued to:

    • return/get rid of the steal (all the relevant information about the clientele).
    • cease operations in the same field for a certain period of time.
    • pay all the damages to Business A which resulted by Shimeon's use of the information he stole from Business A.

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