When an employee leaves a business, particularly a senior or commercially important employee, there can be concerns about what happens next. They may have valuable relationships with clients, access to confidential information or plans to join a competitor or establish a competing business.
Clear employment contracts, appropriate restrictive covenants and a well-managed exit process can significantly reduce the risks associated with employee departures.
Make sure employment contracts provide appropriate protection
Protecting the business should begin long before an employee resigns.
Employment contracts should clearly address issues such as confidentiality, intellectual property, notice periods and any restrictions that will apply after employment ends.
The protections should reflect the employee’s actual role. A senior salesperson with close customer relationships, for example, may require different restrictions from an employee with no client contact or access to commercially sensitive information.
Contracts should therefore be reviewed as employees are promoted or their responsibilities change.
Protect confidential information
Employees can have access to valuable business information, including:
- Customer and supplier information
- Pricing and financial information
- Business plans and strategies
- Tender information
- Product development plans
- Technical information
- Trade secrets.
Employment contracts should clearly explain what information is confidential and how it can be used.
Employees also owe certain duties relating to confidential information during their employment. However, properly drafted confidentiality provisions can provide additional protection after employment ends.
Employers should remember that confidentiality clauses cannot lawfully prevent certain protected disclosures, such as whistleblowing or reporting a crime.
What are restrictive covenants?
Restrictive covenants are contractual provisions that limit certain activities after an employee leaves.
They can include:
- Non-compete clauses – restricting an employee from working for a competing business or establishing one themselves for a specified period.
- Non-solicitation clauses – restricting approaches to certain customers or clients.
- Non-dealing clauses – restricting business dealings with particular customers, even where the customer makes the first approach.
- Non-poaching clauses – restricting attempts to recruit former colleagues.
- Confidentiality restrictions – protecting commercially sensitive information after employment ends.
Restrictive covenants can be enforceable, but they need to be carefully drafted. Acas guidance notes that employers will not usually be able to enforce them unless they are clear, specific and appropriately time-limited.
Are restrictive covenants always enforceable?
No. Employers cannot simply include a broad restriction preventing an employee from competing and assume it will be enforceable.
Broadly, a restrictive covenant needs to protect a legitimate business interest and go no further than is reasonably necessary to protect that interest.
Legitimate interests can include protecting confidential information, customer connections and the stability of the workforce.
The appropriate restriction will depend on the employee’s seniority, responsibilities, access to information and relationships with customers.
This is why restrictive covenants should be tailored to the individual rather than copied across every employment contract.
Note the law in relation to non compete clauses is under active reform. Previously there was a proposal to cap non-competes at three months but this was never enacted. In October 2026 the Government announced it will legislate to reform non-compete clauses, but no detail or timing has been set and nothing is in force as yet.
Consider using garden leave
Where an employment contract allows it, an employer may place a departing employee on garden leave during their notice period.
The employee remains employed and paid but may be instructed not to attend work, contact customers or access business systems.
Garden leave can provide valuable breathing space where an employee is moving to a competitor. During this period, customer relationships can be transferred and commercially sensitive information can become less current.
It can also work alongside post-termination restrictive covenants as part of the wider protection available to the employer.
Manage access to company information
Once an employee resigns, employers should consider what information and systems they still need to access during their notice period.
Depending on the circumstances, this may involve:
- Changing access to sensitive files
- Removing access to particular systems
- Reviewing unusual downloads or transfers of data
- Recovering company laptops and mobile devices
- Ensuring documents are returned
- Removing access to shared accounts following departure.
Any monitoring should be carried out lawfully and in accordance with the employer’s policies and data protection obligations.
Remind employees of their obligations
An exit process provides a useful opportunity to remind an employee of any continuing contractual obligations.
Employers may want to confirm in writing the restrictions that remain relevant after termination, particularly where the employee is moving to a competitor.
The employee should also be asked to return company property and confirm that confidential documents or information have not been retained.
This can help avoid uncertainty about what is expected after employment ends.
What if a former employee approaches clients or staff?
If an employer suspects that a former employee is breaching restrictive covenants, it should establish the facts quickly.
Relevant evidence could include:
- Client communications
- Emails
- Social media activity
- Information from customers
- Evidence of staff approaches
- Documents or data taken before departure.
The wording of the employment contract should then be reviewed to determine whether a breach may have occurred.
Employers should avoid making unsupported allegations before understanding the legal position.
Can an employer take urgent legal action?
Where a breach threatens serious or irreversible damage, urgent court action may sometimes be appropriate.
An employer may be able to seek an injunction requiring the former employee to stop particular conduct while the wider dispute is resolved.
For example, this could potentially be considered where a former employee is using confidential information or acting in breach of an enforceable restrictive covenant.
Restrictive covenants can be enforced through court proceedings where appropriate.
Because injunction applications are time-sensitive, employers who believe an immediate threat exists should seek legal advice quickly.
Review protections before someone resigns
The best time to think about business protection is not when a key employee hands in their notice.
Employment contracts and restrictive covenants should be reviewed periodically, particularly when employees are promoted, take responsibility for important clients or gain access to commercially sensitive information.
DTM Legal’s Employment & HR team advises employers on confidential information, restrictive covenants and wider business protection, from drafting appropriate contractual provisions to dealing with suspected breaches following an employee’s departure.
If you are concerned about protecting your business when an employee leaves, contact DTM Legal’s Employment & HR team to discuss the protections available.