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EMPLOYMENT: Confidentiality and post-termination restraints

In order to protect themselves as far as possible, employers must ensure that requirements for confidentiality, both during the employment relationship and after it ends, are set out in writing. Reliance on implied terms is risky.

The same applies if an employer wishes to prevent a former employee “poaching” staff or customers or misusing contact information.

Most post-termination restraints imposed by employers need to be measured against an objective standard of reasonableness. The tougher the restraints, the more likely they are to fail. Only restraints which go no further in time and extent than is reasonably necessary to protect the employer’s legitimate interests will be upheld. It follows that the blind use of standard precedent clauses is dangerous. Such clauses need to be tailored to the individual circumstance.

We advise both employers on protection of their businesses and employees who wish to break away and set up on their own. Getting it wrong can be a very costly business. The standard response from an employer who wishes to enforce restraints is to seek and immediate court injunction. Good drafting and good advice are both essentials.