In an increasingly competitive business world, an employer will seek to do all it can to protect its clients, knowledge and asset base from competition. An employee, on the other hand, will wish to retain and maximise his marketability in a free labour market. The potential for conflict in these circumstances is considerable.
When an employee resigns or is dismissed, it should not be assumed that his or her departure is the end of the parties' obligations to one another. A prudent employer will frequently include terms in the employee's contract of employment or service agreement that seek to impose obligations on the former employee after termination. These obligations might include, for example, an agreement by the former employee not to poach or solicit clients or staff of the former employer or to set up or work for a competing business within a defined geographical area and/or defined period of time.
The law encourages competition and freedom of movement in the labour market. There is generally a fine balance to be struck between protection of the interests of the former employer and the rights and defences available to employees and third parties involved in this situation. In such cases, employees, employers, prospective employers and other third parties will require urgent advice.
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