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Departing Employees: Protecting the Family Silver

October 2008 - Employment. Legal Developments by Dillon Eustace.

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An issue which frequently arises for companies is what do if an employee goes to a competitor or decides to set up on their own in competition to their previous employer. This is particularly serious if the employee concerned is a senior person with influence over customers or fellow employees. In some cases the loss of a key employee to a competitor can result in significant damage to the business. In the financial services sector this can be a real problem due to the fact that many valuable relationships are to some extent personal between the client and the employee when a rapport and reliance on advice has built up over a considerable period. It would not be unusual for a client to deal exclusively with a particular individual within a company. Recent years have seen whole teams leave one company and go to work for the competition. As well as the obvious loss of this resource, the company may suffer from a failure of confidence amongst clients who may perceive that there may be a fundamental problem in the company to result in a mass walk out. The bigger the numbers leaving or the more influential the personnel involved, the more likely there is to be publicity whether in the general media or in more specialised publications.


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