What if a former employee becomes a threat?

The good news is that employers have a right to expect former employees to behave reasonably, and they generally do even if they leave under a cloud. The bad news is that if they don’t it can be a long, complicated and expensive process to tackle their unreasonable behaviour.

You would think that if a robust employment contract with well worded restrictive covenants (where relevant) is in place it would be pretty straight forward to stop an employee from breaching their contractual terms but, in reality, assuming a strongly worded legal letter hasn’t worked, the employer would need to apply to the courts for an injunction, which is ridiculously expensive.

Even then, for a judge to find in the employer’s favour, all contractual restrictions must be reasonable and also the employer must be able to show that the actions of the employee have caused a detriment to the organisation, or would do in future if their behaviour continues.

Unfortunately there is no alternative to having well written contracts. They are the only answer to tackling this issue if it arises. That being the case, what would count as ‘reasonable’ restrictions?

Terms such as confidentiality on leaving, and not being disrespectful about the employer are fairly standard in employment contracts and are legally enforceable. Where more protection is needed by the employer e.g. for key or senior employees or those that have commercially sensitive information / relationships this is where restrictive covenants, often termed ‘post-employment restrictions’ come in.   

Generally, it is safe to include a clause in restrictive covenants preventing the individual from working for a competitor after leaving, although in recent years the courts have reduced the maximum timescale for this restriction to 3 months rather than six in their judgements, unless there are unusual circumstances such as for a very senior or commercially important employee.

Where our customers wish to continue to specify six months in their restrictive covenants we normally advise them that, due to the clause being likely unenforceable, if the  employee challenges the length of the clause when they leave they should reduce it to 3 months as part of a Settlement Agreement, as six months is likely to be rejected by the judge leaving them with no protection – you can limit an awful lot of damage in three months and the individual’s replacement can develop new relationships with customers in that time so it is better to be safe than sorry!

Finally regarding timescales, don’t forget that, legally, any time the employee spends on Garden Leave needs to be deducted from any time based post-employment restrictions so you can’t get round this issue by imposing 3 months Garden Leave and then rely on a 3 month time based restrictive covenant on top.

In addition to being careful with timescales, employers need to be mindful that a blanket ban on former employees working for any competitor anywhere in the UK during the restricted period is too broad and is unlikely to be enforceable. Normally you need to either restrict the individual from working in a specified geographical area such as 30 miles, or to name a reasonable number of specified competitors they cannot work for. 

Moving on to other restrictions, it’s generally still ok to include a clause preventing the ex-employee from dealing with customers they dealt with previously for 6 months after they leave, and where relevant the same applies to suppliers. 

On the rare occasions where an ex-employee threatens the company or individuals, either physically or with other actions that would endanger the organisation’s ability to legitimately carry out its business, this becomes a criminal issue and is likely to be covered by the Protection from Harassment Act (1997) so the Police would need to be informed.

In our experience, as long as documents are reasonable and well worded the vast majority of employees accept their contractual terms and restrictive covenants without question and, on leaving, comply with them, often informing their new employer of the terms and agreeing a compromise with them until the restrictions have ended if necessary. 

Clearly if there are no such restrictions in place, or they are badly worded and therefore unenforceable, the organisation is open to former employees abusing the knowledge and relationships they have built up during their employment, causing significant damage to the organisation – who will then have no ability to cease or challenge the behaviour. 

In summary, although they can be difficult and costly to enforce, most employees comply with the terms of well written contractual documents and, if they act in a way that is damaging to the organisation they are the only chance you have of tackling that behaviour.