In 2019, a major automotive manufacturer, called Auto Inc., discovered that one of its former employees had stolen confidential designs and provided them to a competitor. The employee, a design engineer, had accessed Auto Inc.'s proprietary designs for an innovative electric vehicle and had shared them with a rival manufacturer. Auto Inc. launched an investigation and discovered that the employee had been approached by a rival manufacturer, who offered him a significant sum of money in exchange for the designs. The employee had initially refused the offer but eventually agreed to steal the designs after experiencing financial difficulties. Auto Inc. filed a lawsuit against the former employee and the rival manufacturer. The former employee admitted to stealing the confidential data and agreed to settle with Auto Inc. for damages. However, the rival manufacturer denied any wrongdoing and argued that it had not solicited or received the stolen trade secrets. 

The case went to trial, and evidence presented by Auto Inc. showed that the rival manufacturer had made significant improvements to its electric vehicle designs shortly after the former employee had provided it with Auto Inc.'s proprietary designs. The jury found the rival manufacturer guilty and ordered it to pay damages to Auto Inc. However, the case did not end there. During the trial, it was revealed that several other Auto Inc. employees had also shared other confidential prototype designs with other competitors. These employees had been approached by rival companies and had agreed to provide confidential prototype designs in exchange for money.

1. What are the ethical issues posed in the case study?

2.  Should Auto Inc. have taken legal action against its employees who had shared the confidential designs with competitors? Why or why not?

3. What measures can companies implement to protect their confidential data, and how can they ensure that their employees comply with confidentiality agreements?

4.  Suppose you were a consultant hired by Auto Inc. to prevent future trade secret theft. What recommendations would you make to the company to ensure the protection of its trade secrets?

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1The ethical issues in this case include employee theft of confidential designs accepting bribes for ... View the full answer