Protecting your business from former employees should be at the top of every business owner’s agenda. When a key employee leaves to work for a competitor your valuable confidential information and trade connections are at risk. So, what steps should you take to protect your business against these competitive threats?
You must use appropriate restrictions in your employment contract to protect against these threats. You should ensure that these restrictions are carefully drafted and regularly reviewed by an expert to ensure that they are enforceable. You should act to take these important steps as soon as possible.
Confidential Information
Businesses are given very little help under current UK laws, which only stop employees from misusing “trade secrets” (or highly confidential information). This means that an ex-employee is potentially free to use confidential information that does not amount to a trade secret, which could include customer details, marketing plans and other sensitive information about a business.
We therefore advise our clients to include a well-drafted confidentiality clause in their employment contract. This type of restriction should be carefully drafted to ensure that it covers a clear definition of “confidential information” which is relevant to your business and your customers and protects against misuse both during and after employment has ended.
Garden Leave
We also advise our clients to include an express right in their employment contract to place an employee on “Garden Leave” during the duration of their notice period. This allows the business to keep the employee away from the workplace and helps to limit their knowledge of confidential information. It also gives your business the opportunity to protect your customer relationships which may have been disrupted by the departure of a key employee.
Restrictive covenants
We also advise our clients to include a set of comprehensive restrictive covenants in their employment contract to protect their business from the competitive activities of former employees. This normally includes a restriction against them joining a competitor or setting-up in competition; a restriction against soliciting or dealing with customers or prospective customers; a restriction against poaching staff; and a restriction against interfering with existing suppliers.
It is important to understand that restrictive covenants can only be used by a business to protect their legitimate business interests, which means that they cannot go further than is reasonably necessary to achieve this, otherwise they risk being held void and unenforceable by a Court due to being in restraint of trade. You should always seek expert legal advice before including these types of covenants in your employment contract.
For advice or further information on how to protect your business from ex-employees, call Henry Doswell of Doswell Law Solicitors on 01233 722942. Alternatively, email Henry at henry@doswell-law.com
Disclaimer: Whilst every reasonable effort is made to make the information and commentary contained in this blog accurate and up to date, Henry Doswell takes no responsibility for its accuracy and correctness, or for any consequences of relying on it. The information and commentary in this blog does not constitute legal advice to any person on a specific case or matter. You are strongly advised to obtain specific, personal advice from a lawyer about your case or matter.