Settlement agreements and restrictive covenants

If you work in a position where you are exposed to confidential or sensitive information, such as important client lists, your employer is likely to want to restrict your post termination movements in order to protect their business.

In the case of Coppage & Anor v Safetynet Security Ltd C was employed as a business development director.

When he started employment, he signed a contract that contained post-termination restrictions.

After being called to a redundancy meeting, C resigned. One hour after C resigned, a junior employee resigned.

One day later Freedom Security Solutions Ltd was registered, which C was the face of. A few days after the company registration 5 customers of Safetynet moved to Freedom.

Outcome


It was clear from the evidence that C had solicited these customers. He had clearly breached his non-solicitation obligation. In addition, he was found to have breached his fiduciary duty to Safetynet.

Damages of £50,000 were awarded to Safetynet.

Do not forget a settlement agreement can be proposed by both an employer and an employee. If you are in a position similar to the above, you may be able to negotiate with your employer for a release from your covenants by using a settlement agreement.

If you require advice or assistance on any settlement agreement or employment law matter please feel free to contact us.

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