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05/11/2019

How to protect your business from rogue employees over the festive period

Christmas is often a period when Directors take an extended break to recharge their batteries and spend time with their families. It can also be a period where rogue employees take advantage of the absence of senior personnel to do damage to their employer’s business.

A case that I was involved in started with a remote employee handing in his notice immediately prior to the Christmas break and our client receiving notice immediately after the Christmas break that 62 of its clients who were serviced by the remote employee were moving to another provider who the client believed (correctly as it turned out) were going to be the new employer of their employee.

What steps should you take to ensure that your business can protect itself if it were to face this type of scenario?

  • Put adequate systems in place to protect client relationships. Make sure, as much as you are able, to make the client loyal to the business rather than any one individual.
  • Restrictive Covenants – Make sure you have adequate and appropriate Restrictive Covenants in place. These could include clauses preventing employees from soliciting or dealing with customers. The enforceability of these will undoubtedly be tested in any legal proceedings and ought to be drafted by a specialist.
  • Legal Proceedings – Sometimes legal proceedings are necessary when businesses are faced with a significant threat. The remedies that are potentially open to employers include injunctions to enforce any period of garden leave, injunctions to enforce restrictive covenants and a springboard injunction to neutralise an unfair head start. Injunctions are often granted on an interim basis to preserve the situation until the matter can be brought on to a speedy trial to finally determine the case.

 

Phil Clarke is a Partner at Eaton Smith LLP specialising in Dispute Resolution. He has particular interests in contractual disputes, litigation arising out of corporate transactions, employer/ employee disputes and partnership disputes.