When employees leave an organisation they often take confidential data and trade secrets with them – so how do you restrain former employees from leaking information and soliciting the business of former clients?
Organisations are built on confidential intelligence, from trade secrets to client and supplier information, but when an employee leaves how can employers best protect these assets?
Law firm Duncan Cotterill recommends the following three steps to keep valuable information safe:
“Employment agreements for all employees, whether senior or junior, should contain confidentiality and intellectual property clauses. The confidentiality clause should define the information the employer is seeking to protect and include a requirement to return information on termination of employment. The intellectual property clause should state that all intellectual property created belongs to the employer and that future rights are assigned to the employer,” the firm advises.
Additionally, they recommend the employment agreement should also contain a term which gives the employer the ability to direct the employee not to report for work during their notice period, otherwise known as gardening leave. This allows for the employee to be removed from accessing any confidential information. Restraint of trade clauses can also be an effective measure but they must be reasonable or else may be unenforceable.
“It is no good recording how important certain information is, if it is then splashed all over the workplace for everyone to see. Confidential information should be communicated in a manner that leaves the recipient in no doubt that the information is confidential.”
Employers should also make it clear that clients belong to the organisation, rather than to individuals.
If the employer has reason to believe the employee has removed client lists and/or other confidential information from the business, there are a number of legal remedies which can be pursued – for example, seeking an injunction preventing the employee from acting in breach or suing for breach of contract where the breach has already occurred.
The law firm advises that while key employees are an organisation’s biggest asset they can also be the biggest liability, therefore it is important to put protective measures into place.
Related article:
Restraint of trade clauses under scrutiny
Law firm Duncan Cotterill recommends the following three steps to keep valuable information safe:
- Draft employment agreements carefully
“Employment agreements for all employees, whether senior or junior, should contain confidentiality and intellectual property clauses. The confidentiality clause should define the information the employer is seeking to protect and include a requirement to return information on termination of employment. The intellectual property clause should state that all intellectual property created belongs to the employer and that future rights are assigned to the employer,” the firm advises.
Additionally, they recommend the employment agreement should also contain a term which gives the employer the ability to direct the employee not to report for work during their notice period, otherwise known as gardening leave. This allows for the employee to be removed from accessing any confidential information. Restraint of trade clauses can also be an effective measure but they must be reasonable or else may be unenforceable.
- Treat confidential information as confidential
“It is no good recording how important certain information is, if it is then splashed all over the workplace for everyone to see. Confidential information should be communicated in a manner that leaves the recipient in no doubt that the information is confidential.”
Employers should also make it clear that clients belong to the organisation, rather than to individuals.
- Enforce the employment agreement
If the employer has reason to believe the employee has removed client lists and/or other confidential information from the business, there are a number of legal remedies which can be pursued – for example, seeking an injunction preventing the employee from acting in breach or suing for breach of contract where the breach has already occurred.
The law firm advises that while key employees are an organisation’s biggest asset they can also be the biggest liability, therefore it is important to put protective measures into place.
Related article:
Restraint of trade clauses under scrutiny
