Employees are subject to a duty of loyalty, and therefore if, for example, they try to solicit customers for the benefit of a competitor during their employment this will amount to a fundamental breach of their employment contract, entitling an employer to dismiss them.

After employment ends, unless there are any other specific contractual provisions, employees are only prevented from using or disclosing trade secrets (i.e. information of a highly confidential nature) belonging to a company.

Restrictive covenants

In order to protect yourself against unfair competition, you should ensure that employment contracts for senior and key employees contain appropriate confidentiality obligations and post-termination restrictive covenants.

Restrictive covenants can prevent a former employee from soliciting or dealing with clients for a certain period after termination. They must be drafted carefully so that they are no wider than necessary to protect your company's customer connections.  If they are too widely drafted they will be unenforceable.

Non solicitation/non dealing covenants should be limited to customers with whom the employee dealt with for a certain period prior to termination.  Further they should last only for a reasonable period after termination. A reasonable period in this case will be the time which it would take for your company's new employee to rebuild relationships with customers.

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