Protecting your business when key employees leave

  • You could be left in a very vulnerable position if an employee who is of great value to your business leaves, especially when they may have had access to key business information and subsequently move to another employer (or even competitor).
  • For these employees, specific contract clauses may be used to protect your assets, with a key example being the use of confidentiality clauses and restrictive covenants.
  • At Moore Barlow we can provide you with the specialist legal advice you may need, thanks to the help of our team of experts. We will help to ensure that these contract clauses are drafted properly and can be enforced to the fullest extent, protecting you and your business.
  • We will discuss how we can specifically help you, identifying your needs and making sure your contracts are fit for purpose. If necessary, we can also take action to limit the potential damage if an employee or a whole team has already moved to a competitor.

It is imperative that, as an employer, you protect your assets, as naturally you have invested time and money in your business. You may find yourself in a position of vulnerability if a situation arises where an employee, whom you have trusted and given access to key information, decides to leave and go to another company or set up their own business.

You may be able to mitigate the effect of this happening through a number of different methods, most commonly with the use of protective clauses that are written into employment contracts.

Confidentiality

Protecting confidential information is a priority for every business. This can be done by ensuring that your employment contracts contain specific clauses that prevent the use and disclosure of your sensitive business information.

Our team of experts at Moore Barlow can help you draft an employment contract that includes a confidentiality clause or a non-disclosure agreement if appropriate, ensuring all your business interests are considered.

Restrictive covenants and injunctions

In order to protect sensitive business information, client relationships and to ensure the stability of your workforce, a restrictive covenant may be included in an employment contract. These restrictions mean that once an employee’s employment has been terminated, they are contractually restricted from certain conduct for an allotted period of time.

However, if they are not drafted to be appropriate and relevant for the employee in question, they can be deemed unenforceable. You need to be able to prove the restrictive covenant is:

  • Reasonable
  • Necessary to protect the employer’s legitimate business interests
  • Covers a period no longer than is necessary to protect those interests
  • Legally compliant and enforceable

You may be able to take legal action if you believe that a former employee has breached a restrictive covenant, for example by claiming damages or obtaining an injunction. Our team at Moore Barlow will move quickly to maximise protection for your business as speed is often essential for damage limitation.

Team moves

It is sometimes the case that more than just one employee will move to a new employer, occasionally an entire team will leave, which could have serious implications on you and your business. This can be most detrimental when the new employer is a key competitor, as well as the fact that there will be both cost and time involved in recruiting new staff. It poses a very real threat that valuable business information may be divulged to your rivals.

The use of restrictive covenants aimed at preventing team moves can safeguard your business.

Other ways of protecting your business

An employment contract should sensibly include a ‘gardening leave’ clause. This type of clause helps to prevent an employee having further access to sensitive confidential information by excluding them from your business during their notice period.

If an employee holds a senior position within the company, such as a director, then they will owe fiduciary duties to your business that they are expected to fulfil, and by taking part in a team move there is a possibility they may be in breach of those duties. This could then lead to action in the High Court, which means you may need the help of our legal experts at Moore Barlow.

If you haven’t been able to take the necessary precautionary measures mentioned above then you may need to consider other legal action. For example, to prevent a former employee from using your confidential information to fast track their new career at a competitor you could take out a ‘springboard’ injunction against your former employees. This injunction will probably be contested and our team of lawyers will be able to help you be sure the injunction meets the necessary legal criteria.

As you can see, this is an extremely complex area of employment law and because any advice will be specific to your business and employees, we recommend you talk to our team at Moore Barlow as soon as you have any concerns.

With our experienced employment law teams based across our offices in London, Richmond, Woking, Guildford, Southampton and Lymington, we’re ideally placed to offer your business specialist support, both locally and nationally.