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An Employer’s Guide: Protecting Your Assets with Strong Employee Contracts

When you’ve recruited just the right person to join your business, it’s cause for celebration. A new employee will help the company to grow, or keep it running smoothly. To do this, of course, they need to know everything they can about how your company works, which may include gaining access to contacts, business tactics, and any trade secrets you may have.

But what about when that employee leaves? Can they take all that information and use it to set up on their own, or give it all to the next employer in line? Not if you have a well drafted contract that prevents them.

A strong employment contract should cover the following:

  • Duties

As well as the specifics of their role, to protect your business you must include a clause which notes that, in effect, they should do everything in their power to further your business. This includes reporting anything they see as wrongdoing writing-contents(by them or other employees) and not diverting business opportunities.

  • Notice period

While it can be helpful for an employee to stay on while you find their replacement, or to help train that replacement when you’ve found them, it may be a concern that they are using this time to gather contacts and information, quickly learn more about your processes, or otherwise grab information while they can. Think about this, and if necessary consider:

  • Garden Leave

Garden Leave is an option where your employee is available to answer questions and help out as necessary during their notice period, but is not based in the office while they do that. You still need to pay them for this period, but they will be less risk this way.

  • Confidential information

temporary workIn this clause, it is important that you set out exactly what you consider confidential information to be; use examples so that you’re both clear. This can include contract details and contact information for clients and suppliers.

  • Restrictions on the employee’s activities

You may include a paragraph specifically restricting employee’s activities during or after they leave you. Provided it is within reason, this is enforceable by law.

Don’t forget to update the contract when your employee is promoted or moves to a different area of the business, to ensure it remains valid.

It’s actually fine to draft your own employee contract. You can download templates online, and customise them to suit your needs. The law offers a certain level of protection, for example if your former employee starts using your secret recipes you can bring a case against them, but to be absolutely sure it’s always a good idea to be specific before they begin working with you.

 

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