If you are running an educational institution, sports club, recreation center, financial house, religious organization, medical center, ICT incubation center, hospitality center, manufacturing company, trading company, services company, professional firm or any kind of business; it is legitimate and enforceable in law for you to protect your business interests using restrictive covenants expressed as Confidentiality and Non-Disclosure Agreement, Non-Compete Agreement or Non-Solicitation Agreement.
These Agreements when signed by your employee(s), shall restrict them from leaving your business to work for a new employer, or competitor, or starting up a similar business within your geographical area – where they could damage business by reducing the prestige and human talents of your company, or using your business confidential information for personal gain. Your business confidential information can be anything from business plan, baseline survey data, financial records, marketing plan, trade secrets, client/customer database, details of pricing structures, tendering strategies, etc.
With general employees, you want to have employment policies, but not employment agreements. You should only have employment agreements with employees who are very important to the company and/or have unusual benefits. You should require such employees to sign the restrictive covenants which are your first line of defense to protecting your business.
A smart lawyer can structure bespoke confidentiality and non-disclosure agreement, non-competition agreement and non-solicitation agreement that would prevent an employee from leaving your company within a specified duration; or joining a competitor; or stealing or using your ideas; starting-up within your geographical area or enticing your customers/clients away.
Are there legal remedies for breach by employees?
Depending on what term of the restrictive covenants has been breached by the employee, you should seek and obtain the following legal remedies:
- An injunctive order restraining the employee from joining the new employer or competitor company.
- An injunctive order restraining the employee from starting-up a similar business within your geographical area.
- An injunctive order restraining the employee from using your confidential information anywhere in the world.
- Award of compensatory or punitive monetary damages.
If you want to protect your business with the necessary legal documentations; or you are concerned about employment obligations; employees' claims; compliance with the law; dispute settlement; etc.; you should seek proper legal advice and help from a legal practitioner.
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.