Business Law & Compliance

Protecting your business from annoyed ex-employees

5 min read

16 September 2015

Here are five must-read tips to help protect your business from annoyed ex-employees.

Business owners are extremely busy people. They carry a great deal of responsibility with an abundance of tasks to juggle. Only thing they tend not to invest enough time and attention on is employment contracts at the time they recruit. 

It is always good advice to anticipate things going wrong before they do and provide for those worst case scenarios, such as an employee disappearing with confidential information. This way your back is covered from the start. 

Another potential obstruction that small business owners encounter is that they often have to deal with a limited budget. However, investing at the outset should be seen in the same way as paying insurance payments. 

Here are five tips to help protect your business from annoyed ex-employees:

1. Restrictive covenants

Ensure the contract of employment contains robust restrictive covenants. These will prevent an ex-employee from abusing their access to data and can be set for a period of time following the termination of the employment. 

This is particularly important if employees have access to key customer contacts and/or confidential customer information. 

2. Tighten up your IT system 

Sort out your IT system so that it can detect, and prevent, the transfer of large amounts of data onto separate sources, such as hard drives, USB drives, personal email addresses and the like. Departing employees are a high risk area when it comes to loss of confidential data and intellectual property. 

It can often be years rather than weeks before employers realise that their information has been removed electronically and by then, the damage has been done.

Read more about firing employees correctly:

3. Garden leave 

Employers should retain the right to place key employees on garden leave for their notice periods. It is far easier to control an existing employee by way of enforcing restrictions than one who has already departed. 

It is therefore, a sensible idea to increase notice periods for key employees – making someone stay at home for 3-6 months without access to customers gives the business far more chance to get in touch with their customers and reassure client relationships before the departing employee gets a chance to interfere.

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4. Tailor covenants

Each employee potentially presents a different threat to the business should they leave. Therefore, tailoring covenants is key. For example, an employee in sales and marketing is likely to have access to confidential information relating to customer data and trade secrets. 

Be aware however, that restrictive covenants will be void unless they go no further than is “necessary to protect their legitimate business interests”. 

5. Deleting social media work accounts 

More and more employers insert contractual clauses requiring employees to delete their LinkedIn contacts and accounts on leaving.  

There is much debate as to whether such clauses are enforceable, and whether they actually help protect the business, but the more an employer customises an employee’s LinkedIn account to give it a corporate image, the more chance they will have in asserting proprietorial rights in the relevant LinkedIn accounts.

Many employers get worried about an ex-employee ‘going public with their grievances. However, such outbursts usually only hurt their own future employability. 

Employers can ask Twitter/Facebook etc to take down defamatory remarks and there is always the defamation law itself to protect them, but these small-scale campaigns usually burn themselves out. 

Besides, those businesses which embrace social media can more easily control the fall-out. Controlling current employees is more of a minefield than social media, in relation to conduct issues, but these can be controlled by means of sensible and well-publicised social media policies.

Ed Gregory is a senior associate employment lawyer for Gorvins Solicitors.