It is quite normal that an employer will want to protect their business against the actions of an ex-employee. It is possible to do this by means of clauses in the contract of employment. They are known commonly as restrictive covenants as their purpose is to enforce a restriction of particular activities under particular conditions. They can only be used to protect trade secrets, confidential information and goodwill and to prevent the solicitation of clients, customers and staff. They are typically used when an ex-employee starts work for a competitor or starts up in the same type of business locally.
To be upheld the covenant must be reasonable between the two parties and in the public interest. It must also protect a legitimate business interest and have a scope no wider than is reasonably necessary for the protection of that interest and they must allow the ex-employee to earn a living within the same type of business.
The clauses must be clearly written with a specific interpretation. A time limit and geographical area should be specified. Too long a time limit, too greater an area or too punitive a restriction will jeopardise the clauses enforceability.
If the termination is in breach of contract by the employer then any restrictive clauses are unenforceable.
Once the covenants have been accepted as enforceable by the courts the employer may apply to the High Court for an injunction against the ex-employee continuing their activities. Damages can also be claimed as a result of any financial loss due to the unlawful actions.
Once an employee has been made aware of the confidentiality of certain information or types of information they are under an implied obligation not use or disclose that information. The obligation is not lost once they no longer work for the employer. Enforcement of the employees duty is as for the restraint of trade clauses above.
Inventions made by an employee in the course of their normal or specially assigned duties in their employment are, in general, the property of the employer.
The first owner of the copyright, whether intellectual or otherwise, in works created by an employee in the course of their employment is the employer as are the design rights for any designs.
