Protecting Key Staff

This is a problem faced my many businesses, large and small, especially if the nature of your business is for staff to work closely with clients with whom they build up a strong relationship.

Likewise, if one person leaves to set up on their own it is not uncommon for former colleagues to join them at a later date.

Whilst an employee is employed they owe a duty of good faith to their employer. If they poach clients or entice away employees to set up a rival business and undermine their employer they would be in breach of this duty.

The important question is what can be done to stop ex-employees doing these things after they have left employment?

Employers often look to include clauses in employees’ contracts which seek to restrain the employee from, for example, setting up in competition with their former employer or soliciting clients or suppliers for a certain period after they leave.

These clauses are called post termination restrictive covenants. In order for them to be enforceable they must be reasonable both in terms of how long they look to bind the ex-employee and in terms of the obligations they impose.

Your ex-employee may therefore be in breach of contract if it contains valid restrictive covenants.

He may also be acting in breach of other duties in relation to his contract of employment, in terms of both the express written terms and perhaps unwritten obligations that are still owed to you even though he has left.
Your remedy in this situation would be by way of a breach of contract claim in the Civil Courts for damages. You may also be able to apply for an injunction against the ex-employee to prevent what he is doing.

Taking action, however, will depend upon the contract of employment, what has happened in relation to the employee and client and the circumstances surrounding his resignation. 

Your legal adviser would need to have this information before they can advise you of what action you can take.  

* Tom Devlin is a solicitor in the employment law team with Blackett Hart & Pratt LLP Solicitors. Contact him on 0191-221 0898.