Legal Question in Employment Law in California

Hypothetically speaking, if the employee has earned the commissions, based upon an agreement regarding those commissions, you would be contractually obligated to pay the commissions. If you can prove the employee stole the files and that theft has caused your business damages, you could sue the employee for damages resulting from the theft. You may also be able to obtain injunctive relief to prevent the employee from using trade secrets against you.

Before you make any decision, it would be prudent to consult with employment law attorneys who advise employers. They should be able to provide advise to protect your business interests.

As an attorney who has advised employers for years, Mr. Kirschbaum is correct. You owe the money, but may have an offset if the theft caused economic damages to your company. Depending on the value of what I assume are sales leads, you may need to get an action on file very quickly to stop him from using the leads. Although you are legally entitled to recoupe any money he or a new employer makes off them, it is hard to prove you would have made the sale yourself. Far better to shut them down ahead of them trying to use the customer or lead information.