You can’t do that.

One of your senior employees has resigned and they’ve moved to a competitor. You find out that they’ve started contacting your clients and tried to persuade some of their former colleagues to join them at their new employer. What can you do about?

You go to their personnel file and get out their contract of employment. You’re looking to find out if they signed the most recent version of your contract of employment which contains restrictions on their conduct after termination. They did, so you ask your solicitor to write a letter to them, reminding them of their restrictions and that you will take legal action against them unless they cease breaching them. It works and no legal action is required.

Many employees try to argue that their former employer can’t stop them “earning a living” and that any restrictions will be unenforceable. But that’s not right. Provided that the restrictions go no further in extent or duration than to protect the employer’s “legitimate business interests”, you will be able to enforce them, potentially with an injunction against the former employee and a claim for damages if they do not accept that they are bound by them.

Any restrictions should be very carefully worded and tailored to the role which the employee is to carry out. They should normally only be prevented from, say, soliciting or dealing with clients or customers (or carefully defined prospective customers) with whom they had personal dealings within a prescribed period prior to the termination of their employment. The same goes for restrictions relating to the poaching of colleagues. Other restrictions could include not setting up in competition, being employed directly by a customer or interfering with relationships with suppliers.

Top tip this week is to make any job offer or promotion conditional upon the employee signing and returning a contract of employment containing tailored post-termination restrictions. If you have a signed contract with up-to-date restrictions drafted by a solicitor, it will be far more likely that the employee will be bound by them and not breach them in the first place. A little investment at the start of the relationship provides dividends at the end.

However, do remember that all your good work can be undone if you act in breach of an employee’s contract of employment, such as by constructively dismissing them or by paying them in lieu of notice when you have no contractual right to do so. In these circumstances, the employee will no longer by bound by any restrictions in their contract.

Insights.

Don’t Be Naughty with Notice
12th September, 2019

Andrew Knorpel looks at the potential criminal liability which arises when an employer and employee “agree” that either notice was given or employment was terminated on a date which differs…

Has the sun set?
3rd September, 2019

“We’re all going on a summer holiday” – but what happens after that? Rachel Lemon looks into the possible consequences of couples spending some real time together.

In England’s green and pleasant land
2nd September, 2019

Miranda Green looks at the complexities of international family law.

Pawpular Perks: Pet-Friendly Policies at Work
29th August, 2019

Céline Winham looks at the pawpular perks within pet-friendly workplaces.