Most covenants restricting a former employee from poaching their ex-colleagues contain two prohibitions:
- a ban on approaching ex-colleagues to leave the employer; and
- a more general ban on employing ex-colleagues, regardless of who approached whom first.
Several court decisions have held that the prohibition on the recruitment of a former colleague who freely chooses to seek new employment, without any enticement, is against public policy. As long ago as 1994 the Court of Appeal stated that employees are not mere assets of the employer “like apples or pears”. They have their own rights. In 2013 the High Court stated that these restrictions would prevent people from “earning their living as they choose”.
So should such covenants, prohibiting not just the solicitation of former staff but also their employment irrespective of who made the first contact, still be written into employment contracts? The answer is yes for two reasons:
- The clauses have a deterrent effect. It is often unclear exactly who contacted whom first. Was the employee’s approach really on their own initiative or had there perhaps been a hint or a nudge from a former colleague?
- In the 2015 case of Willis v Jardine Lloyd Thompson,there had been a team move orchestrated by senior managers in breach of their fiduciary duties when still employed. These breaches greatly destabilised the whole workforce. The Court of Appeal allowed a short injunction prohibiting the employment of any staff from the former employer, even if they had not first been approached to jump ship.
It is important to realise that, in their own right, such wide covenants are probably still invalid. In Willis v Jardine Lloyd Thompson it was the fiduciary breaches, not any contractual covenants, that led to the injunction being granted. However, non-employment covenants are still worth having as back up; for example, where the actions of senior management have been so outrageous as to justify a total prohibition on the employment of their colleagues. The covenant should be drafted as a separate clause so that it will not invalidate the legitimate wording preventing the solicitation of staff.