Employee Poaching/Raiding

Employee Poaching/Raiding

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One way to protect the investment you make in your employees is to have them enter into enforceable restrictive covenants. The employment lawyers at Dentons can assist you with drafting and litigating restrictive covenants typically found in employment-related documents, such as:

Offer letters
Employment agreements
Equity grants
Employee handbooks
Stand-alone restrictive covenant agreements
Separation agreements

Basic restrictive covenants usually fall into one of four categories:

Confidentiality provisions, which prohibit the disclosure of certain confidential and proprietary information
Non-competition provisions, which prohibit an ex-employee from working in a competitive business for a specified period of time after the employment relationship ends
Non-solicitation of employees provisions, which prohibit an ex-employee from soliciting the former employer’s employees for a specified period of time
Non-solicitation of customers provisions, which prohibit an ex-employee from soliciting the former employer’s customers for a specified period of time

Dentons will work with you to draft strong, enforceable restrictive covenants and other provisions that clearly inform employees of their duties to their employer and provide your best protection against the loss of confidential information, customers, and other employees. Should a former employee breach these covenants or other common law duties, we can help you to assert claims such as breach of contract, breach of fiduciary duty, tortious interference or unfair competition. And in situations involving a competitor’s attempts to hire your employees or departing employees’ misuse of confidential information, use Dentons’ experience across all industry sectors to guide you on how to best protect your rights. In the event of litigation, our employment teams understand the procedural and substantive laws involved in obtaining or opposing expedited discovery, temporary restraining orders and preliminary injunctions.

And in situations where a competitor hires, or is interested in hiring, multiple employees of your organization, use Dentons’ experience across all industry sectors to guide you on how to best protect your rights. In the event of litigation, our employment team understands. We have the experience to successfully litigate on your behalf, efficiently and to conclusion.

Experience

Restaurant chain: Obtaining an ex-parte injunction, preventing a Michelin-starred chef and the group operations directors and finance director from leaving to exploit a maturing business opportunity.
The Strive Group, LLC: Recently winning a six-week jury trial in New Jersey state court on behalf of a company in the Point of Purchase Display business and the company’s majority owners. The plaintiffs—an LLC member/former sales executive and his wife (also a former employee)—asserted claims for breach of contract, fraud, conspiracy, defamation, and tortious interference with contract and prospective economic advantage, and sought compensatory damages in excess of $10 million plus punitive damages. Our clients had terminated the former executive's employment for "cause" due to his submission of false and/or improper requests for expense reimbursement and his improper solicitation of employees. After the plaintiffs rested their case in chief at the trial, the judge granted our clients' motion for directed verdict with respect to the defamation, conspiracy, and tortious interference with contract claims. At the conclusion of the trial, the jury returned a unanimous verdict in favor of our clients with respect to the plaintiffs' remaining claims of breach of contract, fraud, and tortious interference with prospective economic advantage, and with respect to our clients' counterclaims for breach of contract, breach of fiduciary duty, and fraud.

Insights

Post-termination competition: the good, the bad and the blatant

January 8, 2024

United Kingdom: In the recent case of PSN Recruitments Ltd v Ludley and another (2023), the Intellectual Property Enterprise Court (IPEC) held that the claimant (the former employer) had suffered loss and damage amounting to more than £80 thousand in proceedings for passing-off.

Restrictive Covenants Football Club

November 17, 2022

United Kingdom: The men's football World Cup is underway, so what better time to discuss the importance of a strong defence? In this article, we do just that and, specifically, provide 11 fun facts about restrictive covenants in employment contracts.