It has recently been reported that the Mercedes Formula 1 team are taking legal action against one of their engineers, Benjamin Hoyle, who is due to leave their company at the end of the year and was thought to be joining the rival Ferrari team.
Mr Hoyle is alleged to have searched for and saved files relating to the Mercedes car’s performance. Whilst we do not have any further details of the case it is likely that Mercedes are seeking an injunction to prevent Mr Hoyle being able to use the information to give their rival any competitive advantage and an order from the court that he returns all documents to them.
This case serves as a useful reminder of the potential damage employees can do when they leave to join a competitor, taking confidential information with them.
There are several things you can do prevent employees from using confidential information they have acquired during the course of their employment with you and to prevent them from joining competitors for a period of time.
- put in place contracts of employment and company policies which provide clear and extensive definitions and examples of what information is confidential;
- ensure that employees return signed copies of their contract at the earliest opportunity;
- label information as being confidential or tell employees something is confidential when it is handed to them;
- restrict employees access to highly confidential information; and
- consider including a Garden Leave clause in your contracts of employment, enabling you to exclude exiting employees from the premises.
You may also want to govern what employees can and can’t do when they leave your employment. Post-termination restrictions can prevent employees from joining competitors; actively soliciting your customers or clients; and poaching employees, where this is necessary to protect your legitimate business interests.
If you already have post-termination restrictions in place, what can you do to prevent employees taking confidential information to new employers, to avoid the need for legal action?
When you are aware that an employee is leaving, consider writing to them reminding them of their duty of confidentiality and any restrictions in their contract, and setting out what the consequences will be if they breach them. You could also ask them to give you an express undertaking, agreeing to comply with those restrictions.
If you need to re-visit your contracts of employment and policies to ensure that you have the necessary protections or if you are worried about an employee who you fear is leaving to join a competitor, please contact one of the specialists in our employment team, who would be happy to discuss these issues with you.