Work Laptop Formatted Without Backup Before Resignation... Supreme Court Rules "Obstruction of Business by Coercion"

Supreme Court En Banc. / Photo by Supreme Court Provided.

[Asia Economy Reporter Choi Seok-jin, Legal Affairs Specialist] The Supreme Court has ruled that formatting and deleting data stored on a work laptop without backing it up to the company's shared folder or handing it over to a successor before resignation constitutes the 'coercion' element of the crime of obstruction of business.

The Supreme Court's 2nd Division (Presiding Justice Cheon Dae-yeop) announced on the 31st that it upheld the lower court's ruling sentencing A and seven others to six months in prison with a two-year probation in their appeal trial on charges of violating the Unfair Competition Prevention Act and obstruction of business.

The Supreme Court stated, "The actions of A and others constitute coercion in the crime of obstruction of business, and as a result, the victim company's management operations were obstructed or there was a risk of obstruction," adding, "At least, there was also a dolus eventualis (indirect intent) regarding obstruction of business."

It further explained, "The lower court's judgment that the defendants' act of deleting data without handing it over and without backing it up to the company's shared folder immediately before resignation constitutes 'coercion' in the crime of obstruction of business is appropriate, and there is no error in the legal interpretation of 'coercion' as argued in the grounds for appeal."

Regarding 'coercion' in obstruction of business, the Supreme Court holds the position that it includes all tangible and intangible forces capable of suppressing or confusing a person's free will, including assault, threats, as well as pressure exerted through social, economic, or political status and authority.

It also clarified, "Even if the force is not directly applied to a person engaged in work, acts that create a certain physical condition capable of suppressing a person's free will or actions, thereby making normal work performance impossible or significantly difficult, can also be included."

In other words, beyond direct physical force such as assault, obstruction of business by 'coercion' is recognized in cases such as closing a store's entrance, cutting off power to prevent business operations, or collective absenteeism by multiple employees.

The court applied this existing Supreme Court stance on 'coercion' in obstruction of business to conclude that formatting and deleting work-related data on a work laptop without backing it up to the company's shared folder also constitutes 'coercion.'

A and others, who worked as senior executives at B, a manufacturer and seller of automatic doors, were prosecuted for establishing a competing company by adding just one English letter to the original company name (violation of the Unfair Competition Prevention Act) and for obstruction of business by formatting and deleting development work, client, and material purchase data stored on their work laptops without backing them up to the company's shared folder before resignation.

According to B's internal regulations, work data on laptops were to be backed up monthly to the company's shared folder, but it was found that they intentionally did not back up work data for three months before their resignation.

C, who served as the company's head of headquarters, conspired with A and others, key executives of the company, to resign around the same time after failing to secure equity rights from the CEO, then established a company engaged in the same type of business as B and produced and used very similar trade marks.

The first and second trials found all the resigning employees guilty, stating, "They used trade marks very similar to those of the victim company (B), and among them, three deleted all work-related data, indicating a serious nature of the crime."

They also pointed out, "The victim company appears to have suffered significant economic damage to the extent that it could not properly conduct business due to the defendants' crimes, and this damage has not been restored."

In particular, the second trial court accepted the prosecution's argument that the sentence was too lenient for C, who led the crime, noting, "Instead of making efforts to restore the damage, he tried to shift responsibility to the victim company's CEO," and overturned the first trial's suspended sentence of 10 months in prison with two years probation, sentencing him to 10 months' imprisonment without suspension.

This content was produced with the assistance of AI translation services.