Monthly Archives: April 2018

Hard Work Needn’t Be It’s Own Reward!

GulliverImageThis is an article designed to ensure that all the hard work applied to building your business does not exit with your departing employees!

Even with the most effective engagement strategy, employers will not please all of the people all of the time. For this reason, it is paramount for employers to have strategies in place to protect their business if key employees leave.

There are many ways in which an employer may protect its business, and choosing the most appropriate (which is likely to be a combination of the areas below) will depend on the type of work that is carried out and the industry sector in which the employer operates. Post-termination restrictions and confidentiality clauses are commonly used, but employers should also consider the potential impact on their business of the use of social media including LinkedIn and Facebook.

POST TERMINATION RESTRICTIONS

Post termination restrictions, also known as restrictive covenants, should do what their name indicates; restrict employees’ activities after their employment has ended. Usually, these restrictions are contained in Contracts of Employment and fall into three categories:

  • Non-Solicitation of employees/clients: this essentially means that the employee is agreeing not to contact the employer’s clients (or possibly potential clients) to obtain business from them and/or agreeing not to poach their former colleagues;

  • Non-Dealing: this means that the employee is agreeing not to do business with clients (or possibly potential clients); and

  • Non-Competition: this is the most difficult type to enforce because of its restrictive nature, but in essence means that the employee is agreeing not to work in competition with the employer.

The key point to remember with post-termination restrictions is that there is a general rule that they cannot be enforced because they are contrary to public policy as an unlawful restraint of trade, unless the employer can show that:

  • it has a legitimate interest that it is appropriate to protect (for example, trade connections or confidential information); and

  • the protection sought is no more than is reasonable.

The public policy rule means that it is very important that post-termination restrictions are carefully drafted. To ensure there are strong prospects of enforcement, consideration will need to be given to (amongst many other factors):

  • the seniority of the employee;

  • the length of time the restrictions last for after termination;

  • what is meant by “clients”; and

  • whether there is any limit in terms of location.

Employers should also pull together as much information as possible about the job that the employee carries out and where they fit in the structure of the business to obtain the most accurate advice on suitable post-termination restrictions.

Thought should also be given to garden leave clauses, which can be very effective; such clauses have the effect of taking the employee out of the “marketplace” during their notice period.

CONFIDENTIALITY CLAUSES

Often employers consider information and knowledge to be fundamental to their business and even well-drafted post-termination restrictions will not sufficiently protect this. Such information and knowledge could include a secret recipe or formula, a list of key business contacts and customers, or specialised IT systems and data which, if disclosed to a competitor or to the general public, could cause damage to their business.

Although “trade secrets” can be protected without having a particular clause in the Contract of Employment, most information, although vital to an employer, will not be considered a “trade secret.” For this reason, confidentiality clauses are commonly included in Contracts of Employment.

Advantages of confidentiality clauses include:

  • they are more likely to be enforceable than restrictive covenants; and

  • they can last much longer than post-termination restrictions.

A good confidentiality clause will protect the business both during and after termination of the employee’s employment, and should set out what type of information is considered to be confidential.

We advise that a confidentiality clause is included in all Contracts of Employment, Service Agreements and Consultancy Agreements.

DATABASE RIGHTS AND SOCIAL MEDIA

Although a confidentiality clause might include reference to databases being confidential, increasingly often we see problems when a dismissed employee seeks to use a database of contacts that he or she has built for the purposes of their work, using social media tools such as LinkedIn or Facebook.

In the information society, databases are simply modern forms of property. A database is often such a valuable asset that businesses are increasingly looking to exploit them in their own right. Many employees will be engaged in producing databases, whether as their main role, or in adding contacts for the purposes of developing the business.

The general rule is that the employer is the owner of the database if an employee has created a database during the course of his or her employment, but this is a developing area of the law when linked to social media. If an employee has used social media to create a database, it will depend on the circumstances as to whether the employee or the employer is considered to be the owner of the database and what the employee can do in relation to contacts made. For this reason, we recommend:

  • setting out rules about the use of networking accounts and how contacts should be recorded and used. This could be by way of a social media policy and/or in the Contract of Employment; and

  • including a clause setting out details of intellectual property rights in the Contract of Employment.

ACT NOW

In summary, to protect their business, employers should:

  1. Get existing Contracts of Employment, Director Service Agreements and Consultancy Agreements reviewed;

  2. Obtain advice on specialist drafting of post-termination restrictions, garden leave, intellectual property and confidentiality clauses; and

  3. Put in place a social media policy and/or contract clause including relating to how contacts made through LinkedIn and Facebook are treated at the end of employment.

Please contact us if you have any queries about how to protect your business, or indeed if you want to find out if you can take advantage of a competitor’s failure to sufficiently protect its business when you want to hire its employees!

ME THREE!

27236204 - vector illustration of stop harassment concept backgroundWith sexual harassment occurring in contexts such as Westminster, Hollywood and even involving the President of the United States, it is hard to believe that in 2018 women in the main, although this is also affecting men, are still having to experience this intolerable behaviour, in both a social and professional environment.

No workplace is immune to sexual harassment, and employers have a duty to take “reasonable steps” to protect employees – if they fail to do so they can be held liable for any sexual harassment engaged in by their staff.

This duty used to extend to protecting employees against third party harassment, such as harassment by customers. However since 2013, an employer only has to protect an employee against a third party if it knew the employee had been harassed by the individual on at least two occasions.

Given the level of sexual harassment in the workplace, the Equality and Human Rights Commission (“EHRC”), between December 2017 and February 2018 spoke to almost 1000 individuals and employers about this issue and produced a report “Turning the Tables: Ending Sexual Harassment in the Workplace.”

One of their shocking findings is a prevalence of toxic workplace cultures, which normalise sexual harassment by a tacit acceptance that this is just what occurs in the workplace! One employee reported to the EHRC, “We’ve been told nothing can be done for harassment with customers except if we see someone who stalks you, then we are allowed to hide out back.”

The other shocking finding is a genuine fear of victimisation if the courage is found to make a report of sexual harassment, particularly as the EHRC found that the most common perpetrator was a senior male colleague. One employee said they were discouraged from reporting an incident, being told “this would damage my brand.” Another employee reported being told by a partner close to the perpetrator that, “the Firm would ensure my career was destroyed if I told anyone about the incidents.”

Employers now need to take a stand to prevent their employers from suffering in silence in this way!

Employers should aim to have a positive workplace culture that does not tolerate or normalise sexual harassment, and which supports its employees in reporting and investigating unacceptable behaviour.

In order to achieve this, they should have a clear policy outlining the steps to be followed if someone is being harassed. An employer should not rely on its generic Grievance Policy for this situation, as the findings of the EHRC demonstrate that this is not sufficient.

Including information on sexual harassment when inducting new employees is an effective way of ensuring that all new staff are clear about the behaviours expected in the workplace and how to report instances when behaviour falls below this standard.

All employees, particularly managers and those in HR roles, should be given training on how to deal with reports of sexual harassment, and the Company should ensure that policies are communicated on an ongoing basis, for example through anti-harassment weeks, periodic training and posters.

Employers can regularly monitor their employees’ views on the effectiveness of its approach through staff surveys.

Putting all of the above in place will not only reduce the occurrence of sexual harassment in the workplace, but will also help strengthen an employer’s defence if a claim is brought against it, as it will be able to demonstrate the numerous steps it had taken to protect its employees.

Going forward, the EHRC has asked the Government to consider introducing a mandatory duty for employers to protect employees against sexual harassment, which will be supported by a Statutory Code of Practice setting out the compulsory steps to be taken by an employer to demonstrate compliance. It is also calling for the Government to develop an online tool, which addresses the barriers identified in reporting sexual harassment by allowing anonymous online reporting. ACAS has been asked to develop targeted sexual harassment training to support employers in achieving the requirements of the Code.

Finally, which may be of interest to Mr. Trump, is a call to make void all Non-Disclosure Agreements, which employees may be asked to sign at the outset of their employment (or a particular social event) with the aim of preventing the disclosure of future acts of discrimination, harassment or victimisation.

Whether the Government adopts these requirements however is yet to be decided.

All Employment Lawyers are not equal

Many employment lawyers demonstrate the following skills that are often accepted as the standard by clients:

  • Perseverance
  • Sound judgement
  • Analytical approach
  • Good communication

These personality traits, while indicating that the solicitor is effective at their job, don’t actually define what makes an ideal employment lawyer – and that’s where FG Solicitors considers that they can make a difference to their clients:

FG Solicitors epitomises the attributes that make the panther an incredible animal and make them the perfect choice for their clients:

  • Sensitive
  • Balanced
  • Determined
  • Sure Footed
  • Great Listener
  • Outcomes Focused
  • Calculated Aggression

These traits when used on your behalf, are the tools you need to ensure your desired outcomes and that your business goals are met.

FG Solicitors have a wealth of experience in employment law and welcome the opportunity to discuss your needs through a no obligation meeting.

To find out more contact 01604 871143.