Strong company policies shield employer

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The Lanzhou Intermediate People’s Court recently found six sales employees at a milk powder company and two employees at a hospital guilty of illegally collecting personal data. Despite employee allegations that they were instructed by the milk powder company to collect the personal data, the company was not held criminally liable for the employees’ criminal conduct because the milk powder company had implemented policies prohibiting employees from illegally collecting personal information.

The sales employees paid the hospital employees to distribute free milk powder samples to new parents and to collect their personal information. With the help of the hospital employees, each sales employee illegally collected information on between 963 and 40,507 people. The court held that this behaviour violated the employer’s company policies prohibiting the collection of personal information without company approval. Thus, while the employees were criminally liable for illegally collecting personal data, the milk powder company was not criminally liable for the employee behaviour.

Business Law Digest is compiled with the assistance of Baker McKenzie. Readers should not act on this information without seeking professional legal advice. You can contact Baker McKenzie by e-mailing Danian Zhang (Shanghai) at: danian.zhang@bakermckenzie.com