Contracts of employment will often contain terms preventing employees from competing with their current employer and from poaching clients and staff. These ‘restrictive covenants’ can be enforceable in certain circumstances. They are a useful tool for businesses who need to protect their client connections or trade secrets and can be a headache for senior staff looking to leave, especially where they want to join a competitor or to set up their own business, with or without their former colleagues.
Since the consequences of breaching a valid restriction can be very serious, both employers and employees need to take expert advice – at the time the restrictive covenants are entered into (to ensure that they are properly drafted) and when they are potentially breached. An employer’s position can be prejudiced if they fail to act swiftly where they suspect that an employee is acting improperly.
Even where there is nothing in writing, an employer may still have a remedy where an employee has removed confidential information for their own use.
If an employer wants to prevent former employer employees from poaching staff and clients after they have left, then they need to ensure that they have strong contractual arrangements in place. This means that they need a lawyer with the expertise to draft valid and binding restrictive covenants and who understand the law if an employee has potentially breached the restrictions.
Employers also need to be aware that they can be liable for the acts of their new employees where an employee has joined them in breach of any obligation owed to their former employer.
If an employee wants to avoid a potential claim being made against them, then they need to take expert advice as early as possible so they can be advised of the pitfalls to avoid.
Our solicitors are experts in relation to these issues having both brought and defended restrictive covenant claims and injunctions.