Protecting Your Business

Have you the best possible protection for your business from your employees/ex-employees?

Imagine if one of your key/senior employees left to join a competitor or decided to set up his/her own business competing with yours? This individual may know your business inside out and may have good relationships with your clients, employees and suppliers. Unless the business is properly protected there is a significant risk that a departing employee may take clients, employees and supplier relationships with them causing considerable damage to the business. History tells us that thus regularly occurs.

One client I acted for lost £2.5m of turnover through having little or no protection in place. You cannot prevent employees from leaving your business, however you can limit what those employees can do during the employment and after they leave to ensure your business is protected. Your employment contracts and internal policies are your business’s primary line of defence against employees disclosing confidential information or poaching your clients, contacts and employees.

Tightly-drafted appropriate post-termination restrictions can prevent an exiting employee from immediately working in direct competition with your business, stealing or disclosing trade secrets or poaching your key clients, contacts and staff, all of which could cause immeasurable damage to your business. Many businesses use precedents obtained from others which seem to have restrictions in place. This can be dangerous as these restrictions need to be tailored to your business and the individual against whom the protection is sought. In addition many employment contracts are old and have not been reviewed or adapted as an individual is promoted in a business. In order to ensure that any restrictions are enforceable they should be regularly reviewed to
ensure they continue to be appropriate to the employee’s role and your business
and should be reviewed as each senior/key person is recruited.

It is not just exiting employees who can cause damage. It is also import to ensure current employees are properly restrained from leaking confidential information to third parties, being engaged in outside businesses, taking Intellectual Property and/or
causing damage during their notice period. This can be done with the appropriate clauses in the employment contracts.

Finally, over the last few years there has been a barrage of developments and changes to employment law. These changes have affected the way in which employers are required to handle their internal practices, manage their employees and resolve disputes in the workplace.  For example, some of the particularly important areas of change include the abolition of the default retirement age, anti-bribery legislation, atypical working and pensions. To help avoid potential liabilities for your business it vital to ensure your contracts and policies are compliant with current legislation and where possible best practice.

In conclusion, therefore ask yourself whether you have the best possible protection for your business and when was the last review of your employment contracts and policies? Are you confident that your policies and procedures are compliant with recent changes to employment legislation and is your business adequately protected from the
risks posed by employees both during and after the end of the employment relationship? Putting these measures in place does not cost a lot but could
cause your business considerable damage without them.

The Hine Legal team can undertake an audit of your contracts and policies for an agreed fixed fee. We will then provide a report and recommend where we think amendment or improvement is required.

For more information please contact

Nick Hine
D 0203 008 5720
M 07931 360 372
nhine@hinelegal.com

Hine Legal
Central Court
25 Southampton Buildings
London • WC2A 1AL
T 0203 008 5718
F 0203 008 5719
www.hinelegal.com

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