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Key employees taking centre stage in employment disputes

KEEPING hold of key employees and preventing competitors from using their contacts and know-how is becoming a major issue as the economy continues to recover, a leading law firm has warned.

Employment experts at law firm Ward Hadaway say that the improving economic picture combined with rising competition in a number of sectors is making the retention of key workers and their knowledge an increasingly high priority for many businesses.

The situation means that confidentiality agreements and restrictive covenants which many senior personnel have in their employment contracts are coming under increasing strain and are the source of a growing number of disputes.

Joe Thornhill

Joe Thornhill

Joe Thornhill, Partner and Joint Head of Employment at Ward Hadaway (pictured), explained: “While the UK was still in recession, most employees’ focus remained firmly on keeping their jobs and helping their employer to weather the economic storm.

“Now that the situation is improving, the economy is picking up and companies are expanding their workforces, the battle for talented, high performing workers is hotting up and many of those who stood by their employer during the recession are now being tempted by offers from rival businesses or are considering starting up their own companies.

“While this is in many respects the sign of a healthy economy, there is no getting away from the fact that it can cause serious problems for companies if key staff leave, particularly if they take valuable inside knowledge, clients or work with them.

“Cases involving employees accused of breaching confidentiality agreements and restrictive covenants in this kind of situation are on the rise, particularly in sectors where customer and client relationships are important, such as professional services, or in roles such as key account managers.”

The increase in these cases has led to Ward Hadaway expanding the scope of the employment protection package which the firm provides to clients in order to cater for such instances.

The package offers a range of insurance-backed cover to employers on employment law issues including employment tribunal litigation and regulatory enforcement for a fixed monthly fee.

Joe Thornhill explained: “Litigation involving breach of covenants or confidentiality agreements can be expensive with the outcomes uncertain so adding this to the employment protection package is a pretty significant add-on.

“It gives companies the ability to be more robust when it comes to these situations in enforcing those clauses.”

The potential damage to companies from unwelcome publicity is also recognised in the new employment protection package with assistance offered on dealing with situations with media involvement, including legal advice and representation at press conferences and other support.

Joe said: “The increasing pace of the media cycle and the potential for social media to multiply the effects of an incident mean that reputational damage is a hazard faced by a growing number of businesses and organisations so this additional support could prove very valuable at a difficult time.”

Finally, additional support is being offered to employees at companies and organisations who use the protection package in the form of third-party confidential helplines for staff dealing with non-work related issues such as debt, bereavement and problems in their private lives.

Joe Thornhill explained: “The link between people’s private lives and their work lives is well established so this kind of support is beneficial not just to employees who have an independent person to talk to and discuss their problems with, but also to employers who can offer the service as an additional benefit to staff, demonstrate that they are concerned about employees’ well-being and potentially reduce absenteeism.

“The aim behind the expansion in the package is the fact that the nature of employment is changing, the issues are changing and we need to be able to meet the challenges of those changes in order to provide the services which modern employers demand.”