{"id":175813,"date":"2024-06-25T13:12:50","date_gmt":"2024-06-25T12:12:50","guid":{"rendered":"http:\/\/realbusiness.co.uk\/?p=175813"},"modified":"2024-12-11T13:26:38","modified_gmt":"2024-12-11T13:26:38","slug":"former-employees-and-your-customers","status":"publish","type":"post","link":"https:\/\/realbusiness.co.uk\/former-employees-and-your-customers","title":{"rendered":"When A Former Employee Is Poaching Clients &#8211; Guide On legality And action"},"content":{"rendered":"<div class='booster-block booster-read-block'><\/div><p><strong>The line between legality and illegality when dealing with a former employee poaching clients from your company lies with the contractual agreement signed by the former employee. Outside of that, there is nothing a business owner can do through legal action, save for a few circumstances. But what are they, and how else may you protect your business? <\/strong><\/p>\n<p>Real Business is putting together this article to outline the options an owner will have, including an overview of the laws governing theft from a former employer and more.<\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_74 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-684fe0d637917\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-684fe0d637917\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/realbusiness.co.uk\/former-employees-and-your-customers\/#How_Do_I_Protect_My_Business_From_Former_Employees_Poaching_Clients\" >How Do I Protect My Business From Former Employees Poaching Clients?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/realbusiness.co.uk\/former-employees-and-your-customers\/#Your_Rights_As_An_Employer\" >Your Rights As An Employer<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/realbusiness.co.uk\/former-employees-and-your-customers\/#Their_Rights_As_An_Employee\" >Their Rights As An Employee<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/realbusiness.co.uk\/former-employees-and-your-customers\/#Your_Guide_To_Preventing_Client_Poaching\" >Your Guide To Preventing Client Poaching<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/realbusiness.co.uk\/former-employees-and-your-customers\/#1_Write_A_Restrictive_Covenant_Into_Your_Employment_Contracts\" >1. Write A Restrictive Covenant Into Your Employment Contracts<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/realbusiness.co.uk\/former-employees-and-your-customers\/#2_Get_A_Signed_Copy_Of_The_Contract_Of_Employment\" >2. Get A Signed Copy Of The Contract Of Employment<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/realbusiness.co.uk\/former-employees-and-your-customers\/#3_Remind_Your_Employee_When_They_Hand_In_Their_Notice\" >3. Remind Your Employee When They Hand In Their Notice<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/realbusiness.co.uk\/former-employees-and-your-customers\/#4_Enforce_Those_Covenants_In_A_Court_Of_Law\" >4. Enforce Those Covenants In A Court Of Law<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/realbusiness.co.uk\/former-employees-and-your-customers\/#What_Are_Alternatives_To_A_Restrictive_Covenant\" >What Are Alternatives To A Restrictive Covenant?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/realbusiness.co.uk\/former-employees-and-your-customers\/#Other_Agreements\" >Other Agreements<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/realbusiness.co.uk\/former-employees-and-your-customers\/#Customer_Loyalty_Scheme\" >Customer Loyalty Scheme<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/realbusiness.co.uk\/former-employees-and-your-customers\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n\n<h2><span class=\"ez-toc-section\" id=\"How_Do_I_Protect_My_Business_From_Former_Employees_Poaching_Clients\"><\/span>How Do I Protect My Business From Former Employees Poaching Clients?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The main way to protect yourself and your business from a thieving ex-employee is via a restrictive covenant. Restrictive covenants are documents or clauses within a contract, in this case, <a href=\"https:\/\/realbusiness.co.uk\/illegal-work-contract-uk\" data-wpil-monitor-id=\"67\">employment contracts<\/a> or separate agreements (which we will get into later), which prevent them from taking action that harms the business that they once worked for. This covers not only the stealing of clients, but also poaching employees, releasing confidential information, and deliberately damaging business-to-client relationships.<\/p>\n<p>Remember that restrictive covenants go before a judge when used in legal action, and can be thrown out if seen as too broad or unfair. Always consult with experts when constructing restrictive covenants. Ensuring you also have the best <a href=\"https:\/\/realbusiness.co.uk\/healthy-relationships-business-partners\" data-wpil-monitor-id=\"68\">employment relationship<\/a> possible with your ex-employee not only helps prevent client poaching from happening in the first place, but also helps your court case in the eyes of the judge.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Your_Rights_As_An_Employer\"><\/span>Your Rights As An Employer<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>When dealing with clients being stolen by ex-employees, there are two scenarios &#8211; one where you had a restrictive covenant within the employee&#8217;s employment contract, and one where you don&#8217;t.<\/p>\n<ul>\n<li><strong>With restrictions &#8211; <\/strong>Depending on whether the claim is high or low value in terms of damages, the employer would have to go to high or county court respectively.<\/li>\n<li><strong>Without restrictions &#8211; <\/strong>There is little to no legal action you can take. Your best bet is to find evidence of misconduct, such as misuse of confidential information or trade secrets.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Their_Rights_As_An_Employee\"><\/span>Their Rights As An Employee<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Outside of being bound by the restrictive covenant, employees&#8217; rights end when they use proprietary client lists, confidential information, or trade secrets to solicit clients.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Your_Guide_To_Preventing_Client_Poaching\"><\/span>Your Guide To Preventing Client Poaching<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>As a business owner, part of your job is ensuring that your legitimate business interests are protected via the many contracts and agreements that exist in the business world. The following is a breakdown of precisely these elements.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"1_Write_A_Restrictive_Covenant_Into_Your_Employment_Contracts\"><\/span>1. Write A Restrictive Covenant Into Your Employment Contracts<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>As we&#8217;ve previously mentioned, restrictive covenants can, and are, thrown out by judges on various grounds all the time. As a result, we always recommend you have a specialist solicitor in employment law or commercial law draft and even enforce these covenants.<\/p>\n<p>Nonetheless, your covenant should have the following details outlined:<\/p>\n<ul>\n<li><strong>Type <\/strong>\u2013 Restrictive covenants come in different types, such as non-solicitation, non-dealing, etc<\/li>\n<li><strong>Time limit &#8211; <\/strong>Covenants tend not to last forever, though they typically last between 6 to 12 months.<\/li>\n<li><strong>Geographical restrictions<\/strong> \u2013 Set the restrictions on where the covenants are in effect.<\/li>\n<li><strong>Protection of key clients<\/strong> \u2013 Write a clause that forbids key clients from being in contact with ex-employees post-departure.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h3><span class=\"ez-toc-section\" id=\"2_Get_A_Signed_Copy_Of_The_Contract_Of_Employment\"><\/span>2. Get A Signed Copy Of The Contract Of Employment<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Whilst you will always have a copy of employment contracts, you will not necessarily have a signed copy. This provides proof that they have read and acknowledged the terms, and in the event of a covenant being broken, it is admission that they went against the contract that they signed.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"3_Remind_Your_Employee_When_They_Hand_In_Their_Notice\"><\/span>3. Remind Your Employee When They Hand In Their Notice<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>When your employee leaves or begins their notice period, have a friendly discussion about their plans. You must remind them of the clause, and although this may seem confrontational, understand that it&#8217;s necessary. This is because even though you may be able to take legal action against them, they may still do damage to your company that isn&#8217;t easily erased.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"4_Enforce_Those_Covenants_In_A_Court_Of_Law\"><\/span>4. Enforce Those Covenants In A Court Of Law<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>After your ex-employee leaves, if you receive information suggesting they\u2019re in breach of contract, you can enforce the covenants legally. Enforcing restrictive covenants is done via court, and we recommend it be submitted by the same specialist who wrote them up. It will be time-consuming and likely cost the business money, but it&#8217;s necessary to recoup any losses and ensure the business world knows of your integrity.<\/p>\n<h2><img fetchpriority=\"high\" decoding=\"async\" class=\" wp-image-193511 aligncenter lazyload\" src=\"data:image\/gif;base64,R0lGODlhAQABAIAAAAAAAP\/\/\/yH5BAEAAAAALAAAAAABAAEAAAIBRAA7\" data-src=\"https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/09\/shutterstock_2117521916-scaled.jpg\" alt=\"Leaving with customers\" width=\"831\" height=\"554\" \/><noscript><img decoding=\"async\" class=\" wp-image-193511 aligncenter lazyload\" src=\"https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/09\/shutterstock_2117521916-scaled.jpg\" alt=\"Leaving with customers\" width=\"831\" height=\"554\" srcset=\"https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/09\/shutterstock_2117521916-scaled.jpg 1200w, https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/09\/shutterstock_2117521916-300x200.jpg 300w, https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/09\/shutterstock_2117521916-1024x683.jpg 1024w, https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/09\/shutterstock_2117521916-1536x1024.jpg 1536w, https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/09\/shutterstock_2117521916-2048x1365.jpg 2048w\" sizes=\"(max-width: 831px) 100vw, 831px\" \/><\/noscript><\/h2>\n<h2><span class=\"ez-toc-section\" id=\"What_Are_Alternatives_To_A_Restrictive_Covenant\"><\/span>What Are Alternatives To A Restrictive Covenant?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Not all employers see a restrictive covenant in a good light. Depending on the size of your business, and the severity of the case, it can cost \u00a31000s in lawyer fees and court costs to pursue. Furthermore, many businesses look down on restrictive covenants &#8211; 60% of businesses. This is because these businesses suffer in hiring people who are bound by these clauses, thereby &#8220;starving&#8221; the labour market.<\/p>\n<p>Nonetheless, alternatives are as follows.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Other_Agreements\"><\/span>Other Agreements<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>There are different agreements to restrictive covenants.<\/p>\n<ul>\n<li><strong>Non-Solicitation Agreements<\/strong> &#8211; Non-solicitation agreements do the same thing as covenants, only they target and protect the relationship between the company and the customer. That being said, it&#8217;s harder to prove and doesn&#8217;t restrict customers from going to the ex-employee.<\/li>\n<li><strong>Confidentiality Agreements &#8211; <\/strong>This agreement protects the trade secrets of the company, but its use is very conditional and suited for some industries more than others.<\/li>\n<li><strong>Non-Dealing Clauses<\/strong> &#8211; This has extensive protections for your business, stopping former employees from dealing with your customers altogether &#8211; but be careful writing them up, judges have been known to find them too broad or unreasonable.<\/li>\n<li><strong>Garden Leave<\/strong> &#8211; Garden leave stops competitors from immediately nabbing your employees by restricting said employees from working. While this stops the transition of your customers to another business, it&#8217;s a temporary solution that is also costly, since you have to pay them to leave. If you cannot remedy the risk of your customers leaving in the meantime, they may just leave regardless.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Customer_Loyalty_Scheme\"><\/span>Customer Loyalty Scheme<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>A senior member of staff leaving and running the risk of taking clients with them is scary, but whilst the notice period is in effect, you have some solutions. Switch your focus toward your existing customers and sweeten the pot with a loyalty scheme, such as discounted rates, reward schemes and free services.<\/p>\n<p><img decoding=\"async\" class=\" wp-image-193512 aligncenter lazyload\" src=\"data:image\/gif;base64,R0lGODlhAQABAIAAAAAAAP\/\/\/yH5BAEAAAAALAAAAAABAAEAAAIBRAA7\" data-src=\"https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/09\/shutterstock_2212527047-scaled.jpg\" alt=\"restriction covenant\" width=\"795\" height=\"530\" \/><noscript><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-193512 aligncenter lazyload\" src=\"https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/09\/shutterstock_2212527047-scaled.jpg\" alt=\"restriction covenant\" width=\"795\" height=\"530\" srcset=\"https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/09\/shutterstock_2212527047-scaled.jpg 1200w, https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/09\/shutterstock_2212527047-300x200.jpg 300w, https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/09\/shutterstock_2212527047-1024x683.jpg 1024w, https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/09\/shutterstock_2212527047-1536x1024.jpg 1536w, https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/09\/shutterstock_2212527047-2048x1365.jpg 2048w\" sizes=\"(max-width: 795px) 100vw, 795px\" \/><\/noscript><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Restrictive covenants are a strong way to discourage your ex-employees from poaching your clients and stealing work from under you. But enforcement should be scaled against that potential loss in revenue. If you missed your chance to add restrictive covenants to the employment contract, consider if any of the aforementioned agreements may suffice as security. Otherwise, letting your ex-employee and client leave without consequence is also an option, and instead, turn your attention to <a href=\"https:\/\/realbusiness.co.uk\/growing-business-innovation-sustainability\" data-wpil-monitor-id=\"66\">growing your business<\/a> without them whilst changing the mechanism by which the poaching may have happened in the first place.<\/p>\n<p>Whichever approach you take, there&#8217;s no denying that an ex-employee approaching clients is disrespectful and upsetting for many business owners. But if you respond appropriately, you can make sure your business isn&#8217;t hurt by their actions too.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The line between legality and illegality when dealing with a former employee poaching clients from your company lies with the contractual agreement signed by the former employee. Outside of that, there is nothing a business owner can do through legal action, save for a few circumstances. But what are they, and how else may you [&hellip;]<\/p>\n","protected":false},"author":26231,"featured_media":175814,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"footnotes":""},"categories":[2065],"tags":[11942,3048,4758,12013],"class_list":["post-175813","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-law-compliance","tag-aug-p","tag-business-law","tag-employment-contract","tag-p2023"],"views":1423,"_links":{"self":[{"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/posts\/175813","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/users\/26231"}],"replies":[{"embeddable":true,"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/comments?post=175813"}],"version-history":[{"count":0,"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/posts\/175813\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/media\/175814"}],"wp:attachment":[{"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/media?parent=175813"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/categories?post=175813"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/tags?post=175813"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}