Hugh McGinley is demanding compensation at a Glasgow employment tribunal for loss of earnings after he resigned from MJM International in March last year.
Mr Kilday's bugging has been accepted by MJM, which is now known as Ultimo Brands International, but lawyers claim they were recording his conversations with operations director Scott Kilday because they feared he was betraying company secrets.
The hearing was taken up with legal arguments yesterday about an email containing confidential financial information.
Mr McGinley, who was represented by his son Matthew, says he emailed confidential documents to himself and worked on them at home and then deleted them when he quit.
But advocate Alice Stobart, representing MJM, said they were having trouble locating the email. MJM also said if they had known Mr McGinley had sent the email to his home address he would have been sacked for gross misconduct.
Meanwhile, about £100,000 of stock stolen from the headquarters of the firm in East Kilbride, South Lanarkshire has been recovered.