WITH little sign of economic recovery and businesses facing ever-increasing competition to keep afloat it is vital to protect your business interests as best you can.

Unless protection is in place, former employees could have a devastating effect on your business.

So how can you do this? The way is to incorporate enforceable restrictive covenants into your employee’s contracts of employment or (if appropriate) compromise agreement, these are known as Post Termination Restrictive Covenants.

The covenants, if drafted correctly, can be used to prevent former employees from soliciting or dealing with your clients or suppliers, encouraging other key workers to leave and join them or disclosing your trade secrets and competing directly against you.

For any covenant to be enforceable, it must be reasonable, and it must protect a legitimate business interest. For a covenant to be reasonable it must go no further than is necessary to protect the business. If viewed as unreasonable then the covenant will be void and unenforceable. Therefore, great care must be taken at the drafting stage.

You must ensure the covenant relates only to that type of work carried out by the employee, and you must ensure that it complies with any accepted industry standard. The covenant must be set for a reasonable duration and geographical extent, referring only to the area where your company carries on its business.

Finally, you must be able to identify any actual or potential harm which would be caused by an employee’s breach.

What can you do if the covenant is breached? Provided you can show any actual or prospective harm, then there are various remedies available, the most important of which is an injunction.

An injunction can be granted at an interim stage to prevent the employee breaching the covenant pending a full trial. This provides the quickest method of protecting your business and in most cases will be sufficient, as a full trial may not take place until the duration of the covenant has expired.

An alternative remedy is damages. If damages are awarded they will be for breach of contract, and therefore seek to put you in the position you would have been had the contract been performed.

A third measure of damages is an account of profits, where the profits the employee makes from his breach of covenant must be paid over to the employer.

Finally, you could bring a claim against a third party if an employee is threatening to disclose confidential information, or is threatening to take up employment with that third party.

We strongly recommend you check your contracts of employment now and if in doubt seek expert legal advice.

*Gillian Markland is head of employment law at Ingrams Solicitors.