Pictured: Stephen Goodrham, partner in the Birmingham office
and head of Gateley's dispute resolution team in England
Poor redundancy strategies and increased demand for key
personnel to give businesses a competitive advantage, have
contributed to an upturn in corporate talent poaching, according to
top 50 national law firm, Gateley. However, it seems businesses are
now more prepared to fight back, with the firm reporting a
significant rise in cases being brought against those breaching the
terms of their employment contracts when joining rival companies.
Lawyers in Gateley's Birmingham office have seen a 25 per cent
increase in fees generated from restrictive covenant cases in the
last six months alone. A trend that looks set to continue according
to partner Steve Goodrham, who heads up the firm's commercial
dispute resolution team in England.
Mr Goodrham said: "The instability resulting from the
increase in organisational restructuring has left many employees
feeling vulnerable and demotivated. If you factor in the pay
freezes and salary cuts that are still being implemented in some
companies, then you can see why businesses are finding themselves
more exposed than ever to competitor approaches towards their
staff.
"We have seen a marked increase in cases where not only specific
individuals, but also entire teams have been targeted. It's become
an even more competitive market for recruiting senior talent and
with the risk of important clients moving across with ex-employees,
it would seem businesses are beginning to take a firmer stance in
protecting their commercial interests and enforcing restrictive
covenant clauses.
"Business heads understand the need to invest in top talent even
against a backdrop of economic uncertainty, and to ensure they are
in the best position for the future. This has led to more senior
level hires and inevitably with that trend comes a spike in
poaching from the competitor talent pool.
"A high profile example happened on our doorstep earlier this
year when the then Birmingham City manager Alex McLeish moved
across to bitter rivals Aston Villa. This put the legal
consequences of leaving one employer to work for a competitor
firmly in the national spotlight. But these incidents are not just
restricted to the world of sports management, it's happening more
and more in the corporate world and particularly in highly
competitive fields, where talent is at a premium."
There are a number of steps businesses can take to ensure their
commercial interests are better protected in the future such as
ensuring well drafted restrictive convenants are included in
employment contracts from the outset and tightly drafted garden
leave clauses are built in to limit competitive damage. However, a
business that feels an employee is already in breach of
post-termination obligations such as restrictive covenants should
seek legal advice quickly.
Mr Goodrham concluded: "It's vital to strike while the iron's
hot if your employee is in breach of restrictive covenants within
their contract and employers shouldn't be put off from pursuing a
claim. The most effective legal option available to them is to
obtain an interim injunction to prevent the ex-employee from
working for a competitor or from soliciting customers or staff for
the duration of any non-compete covenant but this must be done as
quickly as possible."
For more information about Gateley, please visit their website
here: www.gateleyuk.com