For many employers, confidential information, customer connections and a pool of skilled employees are fundamental to the success of their business. In a post-Covid world, where employers need to capitalise on every asset and protect against avoidable threats more than ever before, this is a particularly 'hot topic. Applications for injunctions to protect confidential information are increasingly hitting the courts – a trend that is expected to continue.
Rebecca Jackson highlights some recent employee injunction cases and offers practical advice for employers.
Injunctions against [former] employees
During or following termination of their employment, employees or former employees often have the ability to take advantage of confidential information, strategic plans, customer/client details or other important information relating to their employer's business – often to benefit a rival business. It is therefore common for employers to include, in the contract of employment, various express contractual terms with a view to preventing employees from disclosing confidential information, competing, soliciting clients and poaching employees. Such provisions are often referred to as restrictive covenants or post-termination clauses.
In our In our our recent webinar on restrictive covenants and employer injunctions.
Footnotes
1 [2020] 11 WLUK 254
2 presumably this clause was intended to capture new ventures/start-ups, as well as existing competitors. This is likely to be increasingly relevant in light of the UK Government's stated intentions to boost innovation and entrepreneurialism to support post-Covid economic recovery. See our recent article for more information and for proposals for reform in relation to non-compete covenants.
3 that is, an undertaking to compensate the defendant if it is ultimately decided that the injunction should not have been awarded
4 American Cyanamid Co (No 1) v Ethicon Ltd [1975] UKHL 1
5 [2020] 12 WLUK 192
6 Apart from providing advice on merits and strategy, the involvement of a legal specialist should ensure that the employer's overall position remains protected, and in particular that legal privilege applies, from the outset.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.