With a number of the UK’s workforce working from home during COVID-19, could there be some individuals or teams using the time and freedom to shape plans for their next role, to compete or to seize opportunity to engage in foul play in support of those plans?
While most employees will be keen to hold on to their jobs in this period of economic uncertainty, there will always be those who see opportunity in times of challenge.
“Businesses should be vigilant to the risk of employees abusing their new-found freedom to take preparatory steps to leave employment in search of fresh starts, particularly where that includes branching out on their own in direct competition or joining competitors.
Most employment contracts will include a “full time and attention” clause requiring the employee to focus on his/her job when on your payroll. Most will contain restrictions on use by the employee of confidential information (CI) and there is broader law on this – think client lists, pricing & profitability structures, supplier contractual terms, technical information etc. Most will contain post-employment restrictive covenants. But some employees may be willing to breach any and all of these – desperate times can call for desperate measures.
The English courts recognise the concept of a springboard advantage, whereby an employee gets an unfair head start on setting up and establishing a new competing business by engaging in unlawful acts, including while still employed. Acts such as misappropriation and misuse of your CI, soliciting your customers and staff, and working on a new business start-up during working hours. There is clearly greater scope for this last one in a WFH environment.
While ultimately you cannot stop an employee from choosing to leave, and potentially also from competing (depending on whether enforceable anti-compete restrictive covenants are in place), it is possible to seek injunctive relief to redress the balance of any unfair springboard advantage and to protect your CI, if you act quickly.
While the law in this area is complex, the food for thought is clear. During this pandemic and beyond, when employees are WFH out of sight, it is worth a quick risk assessment. Is your business of a type that an employee might seek and be able to copy in a new competitive business? Do your employees have access at home to highly confidential information that could allow them to compete or that might be of particular interest to your competitors?
If the answer to either of these questions is “yes”, what then? Sledgehammer scrutiny of conduct and productivity is not the answer – a successful WFH culture is based on trust. Be vigilant instead to the existence of red flags. These might be:
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The existence of key individuals with broad access to CI/knowhow but disenfranchised, whether by long term furlough, any restructuring exercises, changes to terms of employment or work relationship breakdowns;
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The existence of tight teams who might contemplate a team move;
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Inexplicable accessing of confidential information/computer activity;
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Inexplicable drop in production or other suggestion of distraction;
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The extent of employee unfettered access to CI from home (and whether access protocols needs to be tightened); and
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Finally, your spider senses – if your gut is telling you something isn’t right, it’s rarely wrong.
If you have reason to be concerned about the possible conduct of an employee or team, act quickly and carefully. Take early legal advice and beware commencing any internal IT investigation that will undermine the reliability of computer forensic evidence.
Disclaimer
This information is for educational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. © Shoosmiths LLP 2024.