Solicitor Catharine Cooksley explains how to make sure your company's secrets remain safe.
All businesses, regardless of sector or size, will have key employees who are invaluable. Who are yours? Is it the dynamic salesperson with the great relationships with customers? Or the charismatic manager who is popular with his team and who gets them to deliver results?
Regardless of their role, these employees will have some things in common - detailed knowledge of your business and future plans, strong relationships with fellow employees and customers, and significant experience in your market and sector, to name a few.
What would you do if one of your stars resigned? How would it affect your business if they set up in competition with you or were poached by a competitor? The impact could be huge, especially if the very attributes you value are used against you to benefit others.
All employers should be alert to this risk. By taking proactive steps during the employment relationship and acting quickly and strategically when faced with a departing employee, you can minimise the potential damage.
Step 1: Tie in your employees at the start
There is little recourse in common law to restrict an employee's actions once they leave. The onus is, therefore, on the employer to put in place the requisite protection, and the time to do this is at the recruitment stage.
When negotiating the contract of employment or other terms of engagement with your recruit, be sure to include relevant restrictions to curtail their activities both during and after employment. If the employee then breaches these restrictions, you have the option of taking legal action to enforce them.
However, restrictions will only be enforceable if they are reasonable, and what is reasonable will vary from business to business and from employee to employee. Avoid an overly ambitious approach, because irrelevant or particularly restrictive provisions could weaken an otherwise strong claim.
To identify the appropriate restrictions, consider the employee's role in the context of your company and how they could damage your business should they leave the organisation. For example:
- Will the employee have access to confidential information or intellectual property?
- Would their departure affect relationships with key customers, suppliers and prospects?
- Would others follow the employee to a new employer? <