Poaching clients at the touch of a button
Companies are being warned to ensure their employees don't steal more than the stationery when they resign or are made redundant.
Workplace law specialists have noticed a big increase in concern by firms about senior staff setting up rival businesses, poaching clients and employees and using confidential information after their departure.
Lawyer Michael Michalandos, a partner in the employment group of law firm Baker and McKenzie, said that the more we became an information economy, the more employers were susceptible to client-poaching and the theft of information such as client details, pricing schedules and sales strategies.
"It's becoming quite prevalent. Employers are more reliant on technology and information," he said. "With the use of internet and email, [you can] transfer information so easily."
Mr Michalandos said about two-thirds of his work now involved the protection of his clients' business, mostly through the inclusion of restraint-of-trade clauses in employees' contracts.
He said clauses should be customised for each employee, taking into account their status within a company, access to confidential information and the length of time over which that information is relevant.
While companies rarely take legal action against former employees, court rulings in recent years have made it clear that bosses have the right to protect their business.
Mr Michalandos cited a case in which an insurance broker was denied his generous redundancy package after he stripped his original employer of 50 per cent of its business within a month of joining a rival firm.
"I think because it [the economy] is getting tougher, employers are more prepared to sue their employees and put their clients in the witness box," he said.
Freehills partner Glenn Fredericks agreed that protection of business was a big issue.
He advised employers to ensure confidential information was secure with passwords and other access restrictions, and to quarantine computers of departing employees should they be suspicious of their intentions.
Investigation of the computer could reveal if a person had been copying or emailing confidential documents, or if information had been burnt onto CDs, he said.
"If the new economy is supposed to be about knowledge, when you hire someone you are giving them a very portable thing which is the knowledge about how your business runs," Mr Fredericks said.
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