Finally, there is a recent case to clarify in what circumstances restrictive covenants that prevent disclosure of confidential information will be enforceable. The IPKat reports on a case in which an employee sought to leave a company to go to a competitor in flagrant breach of the restrictive covenants in his contract.
It is long established law that for such clauses to be enforceable they must be reasonable - as otherwise they operate as an illegal restraint. In other words, generally you have the right to make a living, and if these type of clauses prevent you from doing this for too long they will not be upheld.
This case concerned a senior director that was privy to confidential materials leaving to join a competitor. The restraints in the contract were drafted very precisely. They specified which competitors he shouldn't join, and applied for no longer than 6 months. Whilst the senior director argued that he would not disclose any confidential information to the competitor in his new role the court rejected that argument. It was enough that he had been exposed to this information.
The key to the enforceability of these provisions was how well they were drafted. If you want to stop your staff leaving and immediately joining your competitors, and disclosing in so doing confidential information that is key to your business, your employment contracts should be drafted carefully, and, in addition, you will need to be review the contracts regularly to check they include current details of your competitors. You will not be able to keep ex-staff out of the marketplace forever - but perhaps for just long enough for you to get a head start on whatever it is they know.
Resources
Check out our guide to confidentiality for other useful tips.
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