Ex-IBM employee wins reprieve over contempt fine

Beata Schmid at centre of dispute with firm over claims she took confidential information

A former employee with computer giant IBM, who faced being jailed today for not paying a €1,000 fine imposed for contempt of undertakings to hand over confidential information of the company, has secured a reprieve at the High Court.

Beata Schmid, who previously alleged she discovered severe discrepancies in IBM's sales records and has been dismissed pending appeal, was prepared to go to jail because she "quite simply" cannot pay the €1,000 fine imposed on her by the court last month, her counsel Rory Traynor told Mr Justice George Birmingham.

New solicitors were coming on record for Ms Schmid - Carnakelly, Kilmainhamwood, Co Meath - and wanted an adjournment to address IBM's claims she was refusing to hand over a USB memory stick containing confidential information of the company, counsel said.

Mark Connaughton SC, for IBM, said the case had attracted some publicity, a group called Transparency Ireland had involved themselves and IBM had received correspondence suggesting she was a "whistleblower". IBM's primary concern was to close down the matter with a guarantee information about its customers and other employees would not be disseminated, he said.


What Ms Schmid wants to say about her own situation was up to her, he added. While IBM had received no material from her since June 25th, when the matter was last before the court, it was reassured there appeared to have been no dissemination of such information since.

Provided orders and undertakings restraining dissemination of confidenfial information and requiring its return remain in place, IBM considered it was for the court to decide how to deal with the matter now, he said

The judge said, taking all issues into account, he would adjourn the case to October without activating that part of his June 25th order providing for the jailing of Ms Schmid for seven days if the €1,000 fine was not paid within a month, as it had not been.

On June 25th, the judge noted an IBM expert had found she had copied the material and an independent expert had agreed. He ruled she had breached court orders and her own undertakings as “a result of foolishness or stupidity as much as it is of knavery”.

Today, he said he had no interest in jailing Ms Schmid or anyone else for non-payment of a fine unless it was a case of “won’t pay rather than can’t pay”. If she could provide evidence of inability to pay, he would be happy to look at that but if she paid any part of the sum before October, that would indicate her bona fides.

He hoped Ms Schmid would use the time until October to reflect on the matter and he hoped to ultimately deal with it in a way that would not involve her losing her liberty. That was ultimately her choice, as was the return of the outstanding memory stick, he added. All existing orders and undertakings also remain in place until October, he directed.

Ms Schmid, in dispute with her employers IBM Ireland Product Distribution Ltd over her salary, has insisted she does not have the information which the company alleged was copied by her from a USB memory stick. She says she has handed over everything the company wants but it disputes that.

She was suspended on April 15th for breaching company security policy but has since been dismissed, Mr Connaughton said today.

Mary Carolan

Mary Carolan

Mary Carolan is the Legal Affairs Correspondent of the Irish Times