We have all welcomed the good news of a vaccine that will be available imminently. There is hope that life will return to some form of normality at some point in the New Year. Many businesses have been badly affected by the pandemic, others have faired better.
Employees have borne much of the impact through furlough schemes, working from home, or working long hours. There will be many who feel dis-enfranchised and under-valued and will be looking to make a move. Many Tech businesses have continued to grow and many will be looking forward to continuing anticipated economic growth with plans to grow and develop their businesses by recruiting.
The quickest way to grow a business is to recruit talented people who will assist the new employer on its journey. Employees often see the prize of a new role and the possibilities for future advancement it brings, but think little of the duties and responsibilities that are owed to their current employer.
The law reports are full of examples of employees who, having resigned, and in some cases after employment has ended but before they have handed back computers, have taken and downloaded the current employer’s data. The only logical reason that it has been taken, is to advance the new employer, the employee has no reason to want it.
With employees working from home, possibly on their own as opposed to company laptops, what steps have employers taken to ensure that they monitor the use and downloading of key confidential information. What risk assessments and policies are in place to ensure that monitoring is permitted to take place? What steps are taken when equipment is returned to ensure that information has not been misappropriated?
Having a well drafted employment contract would ensure that suitable provisions are in place to protect confidential information and impose obligations upon the employee to return all such information and not to retain copies. One of the issues that can arise is whether information is truly confidential. How has the employer treated it and protected it. With employees working increasingly at home ring-fencing material and information that is confidential has become more difficult.
Equally, employers should consider what further protection they require. Do they want non-compete, non-solicit and non-dealing clauses; if they do are they willing to spend time and money enforcing them. Is it easier to have longer notice periods and impose garden leave? If they decide to rely upon restrictions are the restrictions enforceable? In other words do they go no further than is reasonably necessary to protect the employers business? Have they been tailored to the employee/job role concerned or are they “standard boiler plate drafting”.
When an employee decamps to a competitor for many the first option is to turn to the law to protect their business. Keeping close to and working with clients before and during a transition phase are just as important, if not more important, than winning a fight at court, and probably a lot cheaper. Clients may follow a departing employee, but generally only if they are unhappy.
On the other side, for those looking to recruit it is important to know and understand what restrictions an employee has agreed to observe. There are many issues to be considered around enforceability, many of which go back to the original inception of the contract. Were the restrictions when they were introduced enforceable? Was consideration given?
There is little point recruiting an expensive employee only to find that they become the subject of proceedings for an injunction, have downloaded confidential information and introduced that into your databases. At that point any competitive advantage is likely to be lost as the new employer becomes embroiled in litigation.
Having a strategy around recruiting employees from a competitor and understanding what they can and cannot do allows the new employer to plan the first 6 or 12 months of the employee’s new career and also helps avoid expensive litigation, permits the employee to work and help grow the business. It is important to understand what restrictions have been imposed upon an employee before they are recruited.
We will be considering these and other issues in more detail in the New Year. Please contact Barry Stanton on [email protected] if you require further assistance on these issues.