Why hiring a lawyer is essential when dealing with former employees

If you’re the Director of a Company dealing with a disruptive former employee, then you will want to deal with the problem effectively and efficiently. Due to the sensitive nature of such matters, it is important that you take all the necessary steps to rectify this.

Our Dispute Resolution Team at Smith Partnership are here to help guide you through the process.

IDENTIFYING THE ISSUE

A former employee is well-placed to use the confidential information they previously had access to for their (or their new employer’s) benefit, which can come at the serious detriment of your own business.

Their actions are defined as a breach of “Post-Termination Restrictive Covenants”. Essentially, these are a set of limited terms that are still binding on the former employee for a specific time-period after they have left your employment, which are aimed at preventing former employees from damaging your business.

There are many reasons why you may need a solicitor to help when dealing with a former employee. One example would be where a former employee has poached, or attempted to poach, clients or employees of your Company in their new role.

The first point to make is that if you want to protect your business in this way, you will need to make sure that the contracts of employment you use provide this protection. If there is any doubt about this, it would be sensible to have your contracts of employment reviewed by our Employment team.

If you are concerned about the actions of a former employee, it is important to have a solicitor review the Employment Contract in full to confirm your options. By having one of our experts do so, we may be able to identify further breaches that may have been missed. Having a solicitor on your side can help to clarify your position fully before matters are taken further.

HOW CAN OUR DISPUTE RESOLUTION TEAM HELP?

Using the example above, we take a progressive approach, and attempt to resolve matters quickly and effectively before having to resort to a Court Order. 

Before going further, it is important to identify whether the Post-Termination Restrictive Covenants are enforceable. Using the below checklist, we can help to confirm that this is indeed the case:

• The term must protect a “legitimate interest” of the Company. That is, for example, to protect connections with current or pipeline customers, or current employees, to prevent poaching.
• That the term is “reasonable”. That the term does not exceed more than is necessary to protect the legitimate interests of the Company.

We will then prepare a Letter Before Action, setting out the issues identified, and detailing the steps your former employee is required to take to rectify the breach. We can demand a return of all confidential information, a schedule of any profits made as a result of poaching clients and request a signed declaration that they will refrain from taking further action in breach of their Post-Termination Restrictive Covenants.

We will set a deadline for this, and confirm that should they fail to adhere to the requests, a Court Order will be sought to prohibit the former employee from taking further action to the detriment of your Company. Damages (that is, the losses that your Company has incurred as a result of your former employee’s actions) may also be sought at this time.

HOW LONG DOES THE PROCESS TAKE?

If it can be resolved outside of Court, then matters can be concluded in roughly 1-2 months.

If the matter involves Court proceedings, then it is likely to take around 3-6 months from start to finish to obtain the Court Order. You will be required to obtain further documentary evidence in support of your application, and we will work with you throughout the process to ensure that the application has every chance of success.

ARE THERE ANY OTHER OPTIONS AVAILABLE?

Parties are strongly encouraged to engage in either Mediation or Arbitration as alternatives to Court proceedings if it is suitable in the circumstances. There are significant cost consequences incurred by parties who could, but refuse, to engage in such Alternative Dispute Resolution (ADR) measures.

Whilst there is no guarantee of success, there are both time and cost benefits to engaging in ADR. It has the potential to provide a more amicable solution between the parties, reduce the time spent in lengthy Court proceedings, or at the very least, help to narrow the issues before proceeding to Court.

Should ADR need to be considered, the Dispute Resolution Team will be able to provide expert guidance on the options you need to consider.

FIND A DISPUTE RESOLUTION SOLICITOR TODAY

If you are a Director of a Company, dealing with a disruptive former employee, Smith Partnership’s Dispute Resolution Team can offer a wealth of legal expertise to help you through the process. Get in touch with our team today to see how we can help you.