Competing Employees

Managing suspicions an employee is preparing to compete

Your confidential business information, key employees and customer and supplier relations are highly valuable assets. In the wrong hands, your confidential information or insider knowledge of what makes those vital relationships tick can both provide a competitor with an unfair advantage and damage your investment in your business. Dealing with the threat of employee competition requires swift investigation, robust action and careful handling.

 

The departure of senior employees with access to important business information poses inevitable risks. In practice, it is hard to stop an employee taking away knowledge retained in their own minds from experience gained whilst in your employment. Notice periods, garden leave and restrictive covenants placing limitations on competition and poaching of employees, clients and suppliers are intended to take the sting out of the damage an employee can do with such knowledge.

Sometimes, though, the temptation to take your confidential information and ignore obligations imposed by an employment contract is just too great, whether the intention is to set up in competition or gain a foothold in a competitor organisation.

Here we address some practical steps to bear in mind when faced with suspicions that an existing employee or leaver may be gearing up to compete.