We do not like to think that our employees might divulge sensitive company information or make an exit en masse for a competing firm but the truth is, it happens.
When it suddenly comes to light that an employee has breached their employment contract by sharing information with a competitor, been working towards their own sideline business on company time or made other breaches, you need to take action.
The first thing you should do is contact a lawyer to find out the steps to take to minimize damages and right any wrongs. A great place to find a verified lawyer is Asia Law Network. Click here to find a qualified lawyer.
What Claims Constitute Breach of Employment Contract?
Any deed, action or breach that breaks the points laid out in the employment contract constitutes a breach. Claims might include:
- Breach of confidence and sharing confidential information
- Conspiracy with other employees, competitors or anyone who might do damage to the employer’s business
- Breach of fiduciary duty that includes dishonest assistance and
- Breach of agreements with suppliers and clients
- Poaching of employees or clients
- Breach of non-competition, non-solicitation and non-dealing covenants
Legal Repercussion
If one, or several, of your employees has breached their employment contract, it may cost you significant losses in time, information, intellectual property, resources and profits. You should contact a lawyer to take steps to repair the situation as soon as possible.
Your qualified lawyer may be able to get an injunction that stops the parties that have breached their contracts from doing further damage while the courts assess any damage claims.
An injunction requests that the alleged offender desists from further use or sharing of any confidential information. They might be asked to deliver or destroy any confidential information still in their possession and desist further action pertaining to company information while court proceedings take place.
Further steps that may be available to an employer with employees in breach of contract might be to put said employees on a type of ‘garden leave,’ where the employee retains their salary but can’t take on new employment with any competitor. To take this action, a clause about it must appear in the original employment contract.
If the employer believes that they have lost revenue due to the actions of the employee in breach, they may make a court case for financial reparation but they will be responsible for fully proving any loss in revenue directly resulting from the employee’s breach of employment contract.
Documentation Needed
If the employer chooses to pursue financial damages for revenue lost due to employee breach of contract, they will need to provide evidence of where profits were lost due to employee breach. These documents might include any of the following that the employer has or can gather:
- Original signed employment contract
- Confidentiality agreements
- Non-competition agreements
- Non-disclosure agreements or agreements related to trade secrets
- Any documentation of the breach of contract: emails, written warnings, signed statements, etc.
- Dismissal paperwork signed by employee
If you are in doubt about one of your employees, it’s best to start collecting information as soon as possible. Keep detailed notes on anyone in your employ that has access to sensitive information or has done anything to arouse suspicions. There have been many breach of employment and loss of revenue cases that have been lost due to lack of evidence on the part of the employer.
We do not like to think that we cannot trust our employees, but sometimes that is the case. Cover your bases to protect your business. Contact a lawyer as soon as you can to ask for advice that pertains to your unique field, situation and jurisdiction. Asia Law Network has verified, qualified lawyers working in the field of employment contracts in your area. Visit our site to find a lawyer that can provide what you need.
Check back often with the Asia Professionals Network Knowledge Archive for more great articles like this.
This article is written by Adrian Mah from Asia Law Network.
This article does not constitute legal advice or a legal opinion on any matter discussed and, accordingly, it should not be relied upon. It should not be regarded as a comprehensive statement of the law and practice in this area. If you require any advice or information, please speak to practicing lawyer in your jurisdiction. No individual who is a member, partner, shareholder or consultant of, in or to any constituent part of Interstellar Group Pte. Ltd. accepts or assumes responsibility, or has any liability, to any person in respect of this article.