As experienced employment lawyers, we frequently advise employer clients on restraining employees’ post-employment activity to prevent competitive activity. A recent case provides guidance in relation to the circumstances surrounding an employee resigning and stating that they do not intend to compete but then subsequently choose to do so.
The High Court (Chancery Division) recently found that whilst a ‘general duty’ exists to answer your employer truthfully, the Judge was reluctant “to hold that an incident of the duty of fidelity is, when asked a straight question a departing employee is under a contractual obligation to explain his own confidential information”.
Clearly, employers are free to protect themselves with properly worded restrictive covenants which if drafted correctly can serve to protect business interests and restrict competition.
This case fails to provide assurances for employers involved in discussions with departing employees and emphasises the need to ensure employment contracts contain sufficient restraints to protect business interests.
Should you have any concerns in relation to restraint of trade or if you require a “health check” on terms and conditions including restrictive covenants, please contact one of the team.
The content on this page is for general awareness only. It is not intended to constitute professional or legal advice. Changes to legislation may have happened since this article was published. The contents of this article should not be used as a basis for action and the reader should be advised to seek the appropriate professional advice based on their individual circumstances.