One of our senior employees has tendered his resignation. He has given the 3 month notice period required under his contract. I think he is going to work for one of our competitors after he leaves. Are there any steps I can take to protect the Company should this happen?


Patricia Rooney, Tughans Solicitors, Belfast:

The first step is to review his contract of employment. Hopefully, it will contain both a garden leave clause and post-termination restrictions which would allow the Company some protection on the employee’s departure.

I would suggest that you require a specific written garden leave provision if you want to ask the employee to stay away from work, restrict contact with clients etc. during his notice period. Meet with the employee and advise him that the Company is exercising its right to place him on garden leave for the remaining period of his notice. The garden leave clause within his contract will set out exactly what he can/cannot do during that period. At this stage, you could also highlight the terms of his post termination restrictions. In the absence of a specific written clause, there is no automatic set off for the period of garden leave against the post termination restrictions.

After your meeting, you should write to him formally placing him on garden leave and, in effect, reciting the provisions around the garden leave arrangement. You should also remind him of his duty of confidentiality and that he remains an employee of the Company during this garden leave period. As you know, as he is an employee of the Company until his notice expires, both the Company and the employee are subject to all rights and obligations under his employment contract.

In the absence of a written garden leave provision, it is questionable whether the Company can force the employee to remain at home during his notice period. Of course, you can do so with the employee’s agreement but it is debatable whether you can force him to stay away. One possible scenario is that if you do so, and the employee wants to attend work and is not allowed, he could resign alleging constructive dismissal. If that is the case, because of his allegation of breach of contract, the Company may find it difficult to rely on any post-termination restrictions.

Turning to the issue of restrictions, any protection for the Company should be comprised in the employee’s contract of employment, covering matters such as non-solicitation of customers/employees and non-compete. Restrictive covenants are generally enforceable provided they do no more than reasonably required to protect the legitimate business interests of the Company. What is reasonable is considered at the time when the parties entered into the contract, rather than in light of subsequent events e.g. the employee’s promotion.

Assuming however that the contract incorporating restrictive covenants was issued at the start of his employment and signed by the employee, you should be able to rely on those and enforce them, provided they are clear and not unduly restrictive. Therefore, once the notice period/garden leave period expires, I suggest you write to the employee setting out the terms of his restrictive covenants. You might also wish to write to a named person within the competitor company advising them of his restrictions if you are sure that firstly, he is going to work there and secondly, his restrictions prevent him for doing so. You could also ask the employee and his new employer to provide an undertaking that neither will breach the terms of the restrictions and or advise them that you will consider action against them. Should they refuse, you could consider taking court proceedings against both parties to enforce the employee’s restrictions but before these options are pursued you should take detailed advice.

In the absence of specific post-termination restrictive covenants, the employee will remain bound by his duty of confidentiality to the Company. Whilst this will not stop him competing with the Company, moving to your competitor, or soliciting clients, it will prevent him using or disclosing Company information which remains confidential, including trade secrets.