PEOPLE
Rogue employees
to protect legitimate business
interests and establish clear
guidelines for how use of
client, product and proprietary
data may be restricted if
an employee resigns, or is
appropriately terminated.
Failure to establish these
protections at the beginning of
the hiring process will limit a
company’s ability to assert its
legal rights if an employee ‘goes
rogue’. Contract provisions that
businesses can use to minimise
damage can include:
lists to competitors. Even
new employers can be drawn
into litigation if evidence of
inducement or financial benefit
is discovered. Additionally,
the courts can force rogue
employees to return all
confidential data to their former
employer, require computer
equipment to be delivered up
and imaged, or demand proof
that all proprietary information
has been destroyed.
It’s recommended that
businesses review contracts on
they do not try to create
unreasonable restrictions on
employees that go beyond
protecting their legitimate
business interests. For example,
whilst a company could
prevent a former employee
from working in a competitive
industry – such as mobile
technology development or
pharmaceutical research – for
a relatively short and defined
period of time, they could
not extend this restriction for
years, as it would create an
a regular basis – at least
every year for key employees.
Evidence of agreement is
required, so signed contracts
are essential. Many start-ups or
growing firms think they have
adequate safeguards in place,
only to find that the restrictive
clauses no longer apply as a
staff member’s role within the
company, or access to sensitive
information, changes over time.
Employers should be
careful that, in attempting to
implement restrictive clauses,
unreasonable hardship on the
individual and would not be
upheld by UK courts.
Although rogue employees
can pose significant risks to
a growing business, effective
planning during the hiring
process and continued
reviewing of staff contracts
and company security policies
can ensure that the appropriate
safeguards are in place.
NON-SOLICITATION
AGREEMENTS
– restrict ex-employees from
contacting former clients,
customers or suppliers for a
defined period of time after
they’ve left the business.
Whilst a
company
could prevent
a former
employee from
working in a
competitive
industry, they
could not
extend this
restriction
for years
NON-COMPETITION
COVENANTS
– prevent key staff from
working for competitors or
seeking similar employment
within the same industry
within a specific
timeframe.
NON-DEALING
CLAUSES
– prohibit former employees
from interacting with clients or
suppliers who may seek them
out after their employment
with a company ends.
STAFF POACHING
RESTRICTIONS
– limit an individual’s ability
to take staff from a former
employer to another company
or new business venture.
CONFIDENTIALITY OR
NON-DISCLOSURE
AGREEMENTS
– impose a duty on employees
not to reveal a company’s trade
secrets, such as pricing, product
design, or market strategy.
Using properly drafted
covenants, companies can
obtain injunctions against
ex-staff who are targeting
customers, or providing client
Contact:
www.gateleyuk.com
96 September 2014
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