Brian, a recruitment consultant, is in the process of being made redundant from an agency. During the redundancy process, unknown to his employers, Brian has been sending details of clients and candidates to his personal email account. He has also set up a limited company with a view to starting up his own competing business.
We are sure you have all heard this story before, but it is worth reviewing the options available to the agency. First the legal options.
1. You stand no chance of being able to stop the employee from competing after employment ends unless you have suitable and reasonable restrictive covenants in place in Brian’s employment contract, so check that has been done. If not, contact us.
2. Make sure you have the actual evidence of “theft” of your client and candidate details.
3. Instruct your lawyers.
4. If you have money to spare, go and get an injunction.
For most the last course is a last resort, so what are the alternatives?
As an additional “prevention of loss” measure, why not ensure that no single sales consultant has ownership of a client’s account. This could apply whether or not the employee is being considered for redundancy. If the relationship is strong the chances are your brand will defeat the errant consultant. The same could apply to your candidates – if you have the work they will probably stick with you.
Alternatively, offer to invest in Brian’s business (if he is any good – if not, don’t worry), making sure Brian knows you are aware of his plans, and giving Brian a way out! Apparently this was James Caan’s preferred method.
This is a serious issue for many recruiters and the key to it is the understanding between you and the consultant from the outset. For more advice on getting your restrictive covenants and employment terms right CALL US on 01273 236236.
Adrian, a highly experienced lawyer, founded Lawspeed in 1997. He is responsible for developing our extensive portfolio of products and services, including the widely used Lawspeed contract templates. Adrian is an expert on “recruitment law” and specialises in contracts, regulatory compliance, employment status and dispute handling. He is chair of the trade body the Association of Recruitment Consultancies, the only lawyer lead recruitment trade body in the UK. Adrian and his co-director Ravi devised Standards in Recruitment as a vehicle for helping drive up standards and compliance in the industry.
Adrian is our lead in discussions with the government over regulatory evolution. Apart from assisting with client support, Adrian’s primary role is research and development into methods of business delivery, our latest service Proterms being his most recent project. Adrian heads our IR35 lawyers team.