A key employee leaving for a competitor — often taking knowledge, contacts or clients with them — is one of the most common and most urgent problems employers bring to us. What you can do depends heavily on what their contract says and how it was drafted.
It comes down to the covenants
Post-termination restrictions — non-compete, non-solicitation, non-dealing clauses — are the mechanism. But they are only enforceable so far as they protect a legitimate business interest and go no further than reasonably necessary. Many are drafted so widely that they would not survive a challenge, which is worth knowing before you threaten action you can’t back up.
What the law will and won’t protect
- Will protect: genuine trade secrets, confidential information, client and supplier connections, and workforce stability — for a reasonable period, over a reasonable area.
- Won’t protect: the employee’s general skill and experience, which are theirs to take, or a blanket attempt to stop them working in the industry at all.
Speed matters
If you are going to enforce a covenant, you need to act quickly. Injunction applications to restrain a departing employee move fast — sometimes within days — and delay weakens your position significantly. A covenant you sit on for weeks is much harder to enforce than one you act on immediately.
The new employer may be exposed too
Where a competitor knowingly induces an employee to breach their contract, or benefits from misuse of your confidential information, they may face liability alongside the employee. That prospect alone often resolves matters, because the new employer has no appetite for the risk.
The lesson for next time
The time to get covenants right is when people are hired and promoted, not when they leave. If your contracts haven’t been reviewed recently, that is the cheap and sensible thing to fix now — while everyone is still on good terms.