New year, new job. It is at this time of year when new year’s resolutions and grand plans are on everyone’s minds, and many people begin to think about looking for a “new horizon”.
Fantastic. After all, a change is as good as a holiday. But what about your obligations to your current employer? And, as the employer, how far can you go in trying to enforce your company’s restrictive covenants against an employee who wishes to leave?
The following are a few points to consider, regardless of whether you’re trying to leave your employment or you’re trying to enforce covenants that your employee happily agreed to when they first began employment.
Is there anything worth protecting?
Confidential information and client contacts are the two key factors every company wants to protect; and every employee wants to take with them. So how does either party get what they want?
The company will need to demonstrate that both the clients, and the information that the employee wishes to take with them, were created by the employee while employed by the company, for the company. The employee, on the other hand, needs to show that the information that he has taken with him was known to him prior to joining the company or was in the public domain.
But how does this specifically relate to client contacts in relation to social networking sites such as Linkedin? Does an employee have to go so far as to’ unlink’ with someone because they have changed their employer? How practical is it for the employer to enforce the restrictive covenants?
Being small islands with small employment markets covering a variety of niche areas, restricting individuals’ employment mobility is not looked upon favourably in the Channel Islands. The overriding test is reasonableness. Regardless of there being a large client base to protect, if an individual is, for example, an accountant, his employment cannot be restricted reasonably beyond six months.
In some cases, and depending on seniority, this may be limited to as short a time as three months. This is regardless of what has been drafted in the employee’s employment contract. Why? Again, it is what is reasonable. An individual should not and cannot be penalised by virtue of their chosen occupation. But how does this practically work?
In these scenarios, how we draft our employment agreements now can have a knock-on effect and far reaching consequences down the line.