When a key employee subject to an employment restraint leaves a business to join a competitor, fast decisions need to be made to protect client goodwill or guard against misuse of confidential information. The more leverage an employer has against the former employee and his or her new employer, the better the prospects of negotiating a sensible solution quickly or, failing that, taking successful legal action. Set out below is a summary of the key legal touch points: Proving loss One issue that looms large in these situations, particularly where the decision taken is to start legal action, is proving that the business has suffered financial loss. Often, there are no immediate financial losses in the wake of the employee’s departure. It may be some time before conduct in breach of the restraint hits the business’ bottom line. The easier it is to prove loss, the more confident will be the decision to proceed with a damages case. Some employers try to side step this…
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