Team moves and restraints
Protecting your business from unfair competition is vitally important. You have invested in building relationships with clients/customers and contacts. You have recruited good people and have spent time, money and effort developing them. You have trusted people with sensitive commercial information which your competitors would be only too pleased to get their hands on. If you are in protective mode, the last thing you want is for all that to walk out of the door as a result of one or more key people leaving.
On the other hand, you may be in expansive mode, looking to recruit good people from competitors. You do not want candidates to be unfairly restrained from joining you, or from operating effectively after they have joined. Nor do you want to get embroiled in litigation with your competitors attempting to enforce restraint clauses in their contracts of employment.
This is a difficult area of employment and partnership law and the stakes are often high. Firms are potentially entitled to enforce post-termination restraints to the extent that they go no further than is reasonable to protect the firm’s legitimate interests. With regard to genuine equity partners (and their LLP equivalents) such restraints tend to be easier to enforce than is the case with salaried partners. But identifying those legitimate interests and deciding what restraints are reasonable to protect them is a complex business demanding specialist expertise and tailored advice.
Our protective work for firms in this area includes:
- Drafting tailored restrictions, garden leave clauses and related incentive and termination clauses in partnership agreements;
- Advising on introducing restrictions and garden leave clauses for existing partners;
- Advising on practical steps to protect the business, including with regard to confidential information and client/customer relationships and team relationships;
- Advising on the fiduciary duties and duties of fidelity of partners;
- Enforcing restrictions, garden leave clauses, fiduciary and other obligations through the Courts, including in relation to team moves
Our expansive work for firms in this area includes:
- Advising on the effect of restrictions, garden leave clauses, fiduciary and other obligations in relation to individual and team moves;
- Advising on tactics for individual and team moves into the firm, including on timing, contacts between team members and contacts with clients;
- Responding to threats of enforcement of restrictions, garden leave clauses and fiduciary duties and defending such claims in the High Court (and beyond).