Directors, senior employees, managers and employees who have access to sensitive business information, such as client contacts, may be subject to restraint of trade agreements which need to be considered when they resign, says the Labour Law for Managers Loose Leaf Service.
Here's why it's important deal with restraint of trade agreements when your employee resigns
A restraint of trade agreement's a contract entered into between you and your employee. In it, your employee agrees for a certain period after the termination of his employment, he won't compete with your business unfairly.
He also agrees that he won't use the information and trade secrets he got while working for you.
A restraint of trade goes beyond confidentiality undertakings. It doesn't only protect the physical information in your employee's possession, but also the information in his head, which he acquired over time.
So when your employee resigns make sure your restraint of trade agreement includes statements saying that for a specified period he won't:
Remember, restraints come into force when your employee's employment terminates. So it'll only be activated when he resigns from your company and ends his employment contract.
If your employee's subject to a restraint of trade agreement and breaches it (for instance by joining a competitor), you have every right to enforce it.
Here's how to ensure a restraint of trade agreement
But don't let it get to this. Make sure you hold a meeting with your employee when he resigns to remind him of the terms in the restraint of trade agreement and the consequences if he's in breach of the agreement.
This'll help ensure you deal with restraint of trade agreements effectively to safeguard your business so you can avoid the situation Aveng currently finds itself in.