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05/10/2009
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.
Thinking of investing in another agency? See our due diligence page
Other quicklinks:
employment contract
employee handbook
candidate terms of business
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