Q: Can you be accused of stealing proprietary data when you used it for work on your personal mach as no corp mac was given
My ex employee seems to be of the impression I want to replicate his software and has sent me a letter from his lawyers stating that I stole his code rather than the truth which is that it was always on my personal laptop from the beginning of my contract due to my ex employer not providing me a corporate machine.
A:
Anyone can be accused of anything.
I think you mean can you be sued for damages for theft of intellectual property. Maybe.
Who owns the software and who is licensed to use it? Just because it is loaded on your personal computer does not mean that you have a license to use it. Did your employer allow you to load software that the employer either owned or paid to have developed? If that is true then you must delete it or return it to your employer according to what their instruction is. They may want to examine your own personal computer and may (?) have the right to do so.
You should probably comply unless you have a license yourself to use the software and can provide that license or at least part of the key to show that you own the key or license to use the software. If your use of the software causes your former employer to lose money and they can prove that because of your use they lost money or suffered money damages (not easy but not impossible) then your legal fees to defend that type of a lawsuit could well outweigh your continuing to use software unless you own it or are licensed to use it.
Even if you improved software while you worked for your employer they more than likely own the efforts of your labor. And if there is client information, etc.... they more than likely own that as well. Seek legal counsel and proceed cautiously. If they spent the money to have an attorney serve you a letter you should spend the money to have your own lawyer review their letter and advise you sooner than later. Paying $500 now for a consultation for an experienced employment lawyer to review the cease and desist letter and your company's policies and procedures as well as any terms of your own employment is a whole lot cheaper than facing thousands of dollars in defense litigation costs which may be many multiples of that sum even if you won.
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