Employers are not always aware of their obligations in relation to privacy in the workplace. The invasion of employee privacy can occur in a number of different ways including through records and information, physical and electronic surveillance and monitoring.
From a company perspective, the advancement of digital workplaces and technology has increased the amount of information employers can access about their employees.
The importance of the Senior Executives team for any business cannot be underestimated. They are ultimately responsible for the culture, performance and success of the business. However, what happens when a senior executive leaves the business. Have you considered how this may impact the business? What are the matters that any responsible business should consider in circumstances where a senior executive leaves?
Following on from our last article in relation to how to motivate senior executives, in this week’s article, we look at the factors an employer should consider ensuring the business is protected when senior employees wish to resign, or the business chooses to remove them.
It is unusual for us to write a case note on one particular case, but the recent High court decision in Ancient Order of Foresters in Victoria Friendly Society Limited v Lifeplan Australia Friendly Society Limited  HCA 43 (10 October 2018) (“Ancient Order of Foresters”), merits such an article.
Is it acceptable for an employee to approach the clients and connections of their previous employer for the benefit of a new employer? The answer to this question depends on a number of matters including whether the employee is subject to restraints preventing such conduct, whether the approaches to the clients occurs before or after the employee leaves the employment and whether the employee uses their old employer’s confidential information. In many of our previous articles, we have discussed the enforceability of restraints of trade and the protection of confidential information.
When an employee or independent contractor leaves a business, they have the potential to significantly damage the business by misusing confidential information and client relationships. To prevent this, many businesses utilise restraints and confidentiality clauses within their employment contracts and independent contractor agreements.
A restraint of trade clause attempts to prevent an employee and/or independent contractor from engaging in competitive activities which may adversely affect the business. However, given that independent contractors are engaged to provide services on an independent basis, the ability to restrain them from working for competitors is problematic as it places fetters on the very independence that marks a contractor relationship.
A recent decision of the Appellate Division of the Federal Court of Australia has recently decided to award over $6 million dollars in damages to an ex-employer in relation to the misuse of its confidential information by two former employees. What is most interesting about this decision is the fact that the order was imposed on the new employer who had benefited from the breach. The decision illustrates that in circumstances where a new employer turns a blind eye to the wrongdoing of its new employees, it may find itself embroiled in costly litigation with possible significant financial consequences.
Surprising as it may seem, a Western Australian Court has accepted that a 10 year restraint may in fact be enforceable. An engineer with highly specialised skills has temporarily been barred from working with any competitors in Western Australia after the Western Australia Supreme Court determined that a 10 year restraint clause was reasonable, at least until the Court has the benefit of having a full hearing into the matter.
Most employees will deal with some sort of confidential information belonging to their employer, during the course of their employment. Confidential information may include client or supplier lists, price information, strategic business plans, databases, details of tenders, inventions or product information and so on. As a result, employers are increasingly concerned that they protect their confidential information from misuse by employees and especially departing employees. In this article, we look at how employers can safeguard themselves from employees misusing confidential information and discuss a recent Federal Court of Australia decision on this key issue.
We regularly receive requests for advice from company directors and officers, of both private and publically listed entities. Whilst there are a range of separate disclosure obligations applicable to public companies and a host of duties and obligations placed on directors and other officers of corporate entities, which is far too broad to canvass within the scope of this article, we are often asked to advise on the ability of employees, offices and directors to compete with their former employer. The position is far clearer where there are existing contractual protections in the form of restraints and specific contractual confidentiality obligations. But what is the position, where there are no such contractual restrictions?
One of the most frequent questions I get as an employment lawyer is “restraints of trade are not really enforceable are they?” The legal position is that restraints of trade clauses in employment contracts are void, unless reasonable, and operate to protect a legitimate business interest. Historically this was interpreted very narrowly, and most restraint clauses were not enforced by the Courts. However, that is not the case today. My advice to people who now ask me that questions is, be very, very careful if you are subject to a restraint of trade clause and you wish to breach it.
Employers often wish to have their employees make an express contractual promise not to engage in competitive activities or to use the company’s confidential information after the termination of their employment. Most often, employers do so by requiring their employees to sign employment contracts which contain restraint of trade and confidentiality clauses.