When a worker leaves your business, they may start or join another business in direct competition with yours using confidential information about your customers and suppliers.

Think your workers wouldn’t harm your business even if your relationship with them deteriorates?

We urge you to reconsider. Even the best employer-employee relationship can turn sour for any number of reasons and there is simply no way of knowing what an employee who feels wronged may do. We can take steps now to protect you and your business from the harm a now hostile employee may cause.

Consider the following case study:

Company X employs Alfred. Company X and Alfred have an employment agreement. The agreement contains a clause prohibiting Alfred from competing with Company X for a set period of time after his employment ends. This is known as a ‘restraint of trade’ clause.

Alfred quits his job and sets up a competing business using confidential information about Company X customers and suppliers he gained during his employment. Company X is trying to have Alfred’s business stopped (Queensland Cosmetic Manufacturers P/L v Greig & Ors [2005] QSC 334 (17 November 2005)).

Reader’s Tip

While Company X did have an employment agreement with Alfred, it failed to cover everything it should have, particularly the need for all current and former employees to keep information about the company’s clients and suppliers in the strictest of confidence. We can advise you on all the associated risks from the outset and prepare a comprehensive employment agreement for your business. Should you so engage us, you will be able to act swiftly against any current or former employee who misuses confidential information and/or competes with your business.

Joe Kafrouni
Legal Practitioner Director
Kafrouni Lawyers

Disclaimer

The information provided by Kafrouni Lawyers is intended to provide general information and is not legal advice or a substitute for it. Business people should always consult their own legal advisors to discuss their particular circumstances. Kafrouni Lawyers makes no warranties or representations regarding the information and exclude any liability which may arise as a result of the use of this information. This information is the copyright of Kafrouni Lawyers.

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