Enticing Business from an ex-employer

Local businesses often have problems when an important member of staff leaves and take with them business or contacts from the employer.

Trevor Dawe a partner with Parrott & Coales Solicitors says :-

“In a recent case an employment contract between two employees and estate agents said the employees would not solicit business from any “customers or contacts” for 12 months after they left that job. 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 contacts 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 then 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 Court as long as they do not last too long after the employment ends. Therefore it is definitely worth considering the inclusion of such provisions in employment contracts in order to protect your business . If you would like to tighten the restrictions in your employment contracts contact us for further information.

For further information contact :

Parrott & Coales Solicitors

Tel: 01296 318500

Email: law@parrottandcoalesllp.co.uk