Enticing Business from an ex-employer
Local businesses often have problems when an important member of staff leaves and takes with them business or contacts from the employer.
Paul Seath, an associate in our Employment Department, says: “In a recent case an employment contract between two employees and an estate agent said the employees would not solicit business from any “customers or contracts” for 12 months after they left. They left and began under the name of another person running an estate agency business in another part of Surrey. The ex-employer applied to the court for an order to stop them enticing customers away. In this case the court did not grant the application. It said that information about the estate agent’s customers and contracts was not a trade secret that needed to be protected and that the restriction on soliciting clients was unenforceable because it did not say to which clients it related. Did it mean clients at the time the employment starts or when the employment was over? The words were unclear.
The moral of this case is to ensure that restrictive covenants in employment contracts are very carefully drafted indeed. If there is any lack of clarity in the words they will be construed against the ex-employer seeking to enforce the provision. However other such clauses which are clear and limited to the geographical and product area with which the ex-employee was involved have often been upheld by the courts, as long as they do not last too long after the employment ends. It is, therefore, definitely worth including such provisions in employment contracts, but crucial to properly draft them for your specific needs. If you would like to tighten the restrictions in your employment contracts contact us for further information.”
For further information contact Paul Seath on (0117) 929 0451 or e-mail pseath@metcalfes.co.uk
This press release summarises the law on issues which we believe may be of interest to your business. It is not a comprehensive review of the subjects and accordingly is published without responsibility for loss occasioned to any person(s) acting or refraining from action as a result of information published