Advising on enforcement of post termination restrictive covenants

David Dixey, specialist employment lawyer for Holmes & Hills, was approached by a logistics recruitment business, urgently seeking advice regarding a departing employee who had indicated an intention to take employment in circumstances likely to be in direct competition with the client company’s business in breach of restrictive covenants contained within the departing employee’s Contract of Employment.

Protecting business interests

Due to the nature of the clients niche logistics recruitment business, and protection of its business interests and confidential information was essential for its ongoing success and profitability.

Fortunately, the employment contracts used by the client contained detailed clauses intended to prevent employees:

1. Working for a competitor company within a period of 6 months after termination of employment;
2. Preventing solicitation of or dealings with customers of the client company with whom the employee had had dealings;
3. A restriction against the misuse of the client company’s confidential information.

Threatening action for damages

On receiving instructions, Holmes & Hills urgently dispatched to the employee a Letter Before Action demanding their assurance that they would not act in any way to breach the Contract of Employment in relation to competitive conduct and that they would respect confidential information. On behalf of our client company we threatened action for damages and injunctive relief unless urgent written assurances were received.

Outcome

Following Holmes & Hills’ involvement negotiations took place between the client and employee resulting in agreement thereby avoiding a need for potentially expensive and protracted Court proceedings.