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1st April 2017

My Employee Is Going To Work For A Competitor, What Should I Do To Protect Our Business?

There are certain steps which you can take in this situation to prevent any catastrophic consequences to your business, however, there is no guarantee that staff will adhere to their obligations.

Contracts of employment should include well drafted clauses restricting activities after employees leave your business. The law won’t enforce a restrictive covenant to stop competition or enforce regulations that unreasonably prevent someone from pursuing their career but it will protect your legitimate business interests. Courts will enforce reasonable restrictive covenants which go no further than necessary in affording protection to your business.

If your employee tells you they are leaving to go to a competitor then you could let them go immediately with pay in lieu of notice. This prevents further access to clients, confidential information or the possibility that they may poach other employees. Clients should be assigned to other members of staff as soon as possible and you should immediately discontinue any electronic access if you have a suspicion that staff may pose a competitive threat.

It’s possible that your employee may have sent client information to their personal email address. You should review emails and files in case anything is missing/destroyed and check social media posts on Facebook, Twitter or LinkedIn to ensure they are not reaching out to former clients online or posting confidential information.

As part of the exit interview you should remind staff of their contractual obligations when it comes to non-disclosure agreements. You should also obtain written confirmation that all company property e.g. laptops, phones, keys, access card, company/client info records have been returned and follow this up in writing with a copy of their signed agreement reminding them that you take these matters seriously.


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