How do I protect my business from employees who resign?
When key employees who work directly with clients and who have access to confidential information leave they can potentially pose a serious risk to your business. It’s crucial that you do what you can to protect your interests.
The best, and enforceable, way to protect your business is to include a restrictive covenant in an employee’s employment contract before they start. If this isn’t in place, you can ask them to sign a Settlement Agreement (formerly known as compromise agreements) containing such a clause when they leave.
Well drafted restrictive covenants can be used to prevent former employees from dealing with your customers/ suppliers and from trying to entice business away from you. They can also stop former employees encouraging other key workers to leave or from disclosing your trade secrets.
For a covenant to be enforceable, it must be reasonable and must protect a legitimate business interest. It must go no further than is necessary to protect your business. If a covenant is viewed as unreasonable then it will be deemed void and unenforceable. They must also be limited to a set period of time and, if possible, be limited to a specific geographical area.
One of the main benefits of reasonable restrictive covenants is that they are a deterrent. But if they are breached by a former employee, there are a few remedies open to you. The quickest and most effective is an injunction which prevents the former employee breaching the covenants. Another option is to seek damages which would look to put you in the position you would have been in prior to the breach.
For advice on restrictive covenants, contact the Harrowells' specialist employment team on 01904 690111 or via www.harrowells.co.uk.
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Gillian Markland, Specialist Employment Solicitor.