What restrictions apply?

First, check what post-termination restrictions the employee is bound by. You’ll typically find these in their employment contract.

The most common restrictions are:

• Non-compete clauses which seek to prevent an employee from directly competing with your business;
• Non-dealing clauses which seek to prevent an employee dealing with your clients/customers;
• Non-poaching clauses which prevent an employee poaching other staff members; and
• Confidentiality clauses which prevent an employee from using the businesses’ confidential information.

The restrictions should be time-limited and applied to relevant geographical areas. A confidentiality clause can apply for so long as the information concerned remains confidential.

Are the restrictions enforceable?

Just because there is a restriction in an employee’s contract, this doesn’t necessarily mean it’s enforceable.

To be enforceable, a restriction has to protect a legitimate business interest and go no further than is reasonably necessary to do so.

Each matter has to be considered on a case-by-case basis. There is no one size fits all approach, as what is reasonable for one employee, may not be reasonable for another.

There are also some common faults to be aware of. For example:

• If the employee’s role changed throughout their employment, the restrictions they entered into at the start of their employment, may not be suitable for the final role they performed. This can impact upon enforceability.
• Was the employee moved to a different company within the group during their employment? If so, this may impact upon whether the restrictions are enforceable and care should be taken to identify the entity which was the employee’s final employer.
• Did the employee sign their employment contract with the restrictions in it? If they didn’t, this may impact upon enforceability.

What evidence do you have?

Evidence is key in showing whether the former employee is in breach of their restriction after they’ve left.

There are a number of places you may be able to obtain evidence:

• Consider speaking to the departing employee’s colleagues to see if they are aware of any potential breaches.
• Has a customer/client told you that the former employee has already approached them for business? If so, is there evidence of that, i.e. emails, texts, invoices etc.
• Have you done a forensic search of their emails to see if there has been misuse of confidential information?

However, caution needs to be taken to not conduct excessive evidence gathering, particularly if the employee is still employed by the business and hasn’t yet left (i.e. if they’re on gardening leave). You want to avoid the employee concerned arguing that you breached the employer’s duty of mutual trust and good faith, which could impact upon the enforceability of the restrictions.

We think there’s a breach, what can we do?

If you suspect there’s a breach and you have evidence to support that, then acting quickly is in the best interest of the business.

The first step in doing so is preparing a comprehensive Letter Before Action and requesting undertakings from the employee.

If the employee has a new employer, a Letter Before Action can also be sent to them to put them on notice that to the extent they induce any of the employee’s breaches they may also be pursued. You can also request undertakings from the new employer to that effect.

If that doesn’t resolve the situation and there is a serious risk of damage to the business, then you will want to consider obtaining an urgent interim injunction to prevent further damage. This is an order from the court that a party refrain from doing something, until a final trial.

How we can support you?

If you need support with enforcing post-termination restrictions, preparing a Letter Before Action or obtaining an urgent interim injunction, contact Jack Heward.