BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) has been rapidly losing its market share and competitive advantage for the past few years, and it’s extremely important for the company to closely guard its upcoming devices. Committed to protect the secrecy of its upcoming smartphones, the Canadian company fired one of its employees in 2011, and handed him over to the Ottawa police. But the case backfired when the employee was acquitted. He filed a lawsuit against BlackBerry, alleging wrongful termination.

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BlackBerry fired its manager for stealing pre-release smartphones

Some of the missing smartphones of BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) were supposed to be with an Ottawa-based software developer. And the company had given its Ottawa manager Weiman Xu the responsibility to look after these devices. So, BlackBerry held Xu criminally responsible for the theft. Six missing smartphones showed up in a video posted on a Chinese website in 2011. Three of the pre-release devices had identification numbers that were assigned to Xu, according to the ailing smartphone maker’s court filings.

The Waterloo-based company began questioning Weiman Xu in September 2011 after a private investigator bought one of the phones back. Xu denied allegations of theft, but BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) wasn’t satisfied with his answers. The company initially asked him to quit, but BlackBerry changed its mind later and fired the manager. After his termination, Xu returned to his former employer’s Ottawa office with a different story.

Xu said he had made a trip to China with two of the pre-release devices, and sold one of them for $1,300 there. He told officials that he had also given away five phones. Xu said that he had learned that three individuals in North America, Indonesia and the Philippines were reprogramming circuit boards for devices that hadn’t passed quality control, and were selling such smartphones in the Chinese black market as BlackBerrys. He claimed that his former employer was not the only victim. The crooks had also targeted iPhones.

BlackBerry had little evidence against its former employee

But Xu backed away from the entire confession in his testimony during the criminal trial. He had not taken any phones to China. And he had made up the story of selling the devices to expose crooks in an attempt to save his high-paying job. But BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) did something so surprising no corporation generally does it. None of the company’s investigations to retrieve the smartphones were admitted into evidence. It was nothing more than hearsay because the Chinese investigators who had traced the phones were never called as witnesses. Worse, BlackBerry had no audio or video recording of Xu’s denial and confession. It means the company was fighting a court battle with little evidences and materials in its hand, according to Ottawa Citizen.

Xu was acquitted. He has filed a lawsuit, alleging that BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) breached the duty owed to him, and fired him in an abusive and high-handed manner. He is demanding $166,000 in damages, which includes one year of salary, bonuses and benefits.