It can be tough when employees move on, but it’s an inevitable fact of business and so whether they’re moving to a competitor, a new venture, or a different industry altogether, employers often worry about the security of their company’s confidential information and client relationships. Without the right legal safeguards in place, you could find your business exposed.
That’s where confidentiality and non-compete clauses come in. These contractual provisions help prevent sensitive business information from being misused or shared after an employee leaves. Ensuring that these reflect your business and are legally enforceable can be overlooked, so here’s your step by step guide to getting it right.
1. Confidentiality clauses: keeping business information secure
A confidentiality clause (also known as a non-disclosure clause) prevents employees from sharing sensitive business information both during and after their employment. This can include:
- Client and supplier details
- Pricing structures and financials
- Trade secrets and product development plans
- Internal processes and business strategies
Best practices for confidentiality clauses
✔ Be specific: Clearly define what counts as “confidential information” to avoid ambiguity.
✔ Cover post-employment use: Ensure the clause applies after the employee leaves, not just while they work for you.
✔ Limit to necessary information: A broad, catch-all clause might not hold up legally—keep it focused on genuinely sensitive data.
Key action: review existing contracts to check whether your confidentiality clauses are clear and up to date. If they aren’t, update them to ensure your business is properly protected.
2. Non-compete clauses: preventing unfair competition
A non-compete clause restricts a former employee from working for a competitor, starting a competing business, or poaching your clients or employees for a defined period. These clauses can be useful, but they must be reasonable and proportionate to be enforceable.
What makes a non-compete clause enforceable?
✔ A reasonable time frame – Typically 3–12 months, depending on the seniority of the role.
✔ A justifiable geographical restriction – Preventing competition in the same local market is more enforceable than a worldwide ban.
✔ Proportionality – The restriction must protect your legitimate business interests, not just prevent someone from earning a living.
⚠ Important: Overly broad non-compete clauses are often thrown out by courts. If a clause is too restrictive, it could be deemed unenforceable entirely.
Key action: ensure your non-compete clauses are tailored to the role and industry—a one-size-fits-all approach won’t work.
3. Handling departing employees the right way
Even with strong contracts in place, how you manage an employee’s departure plays a crucial role in protecting your business.
Best practices when an employee leaves:
✔ Exit interviews: Remind employees of their obligations under their contract, especially regarding confidentiality.
✔ Restrict access: Remove access to company systems, client data, and proprietary tools on their last working day.
✔ Monitor key clients and suppliers: If a key employee leaves, keep an eye on whether customers follow them to a competitor.
Key action: develop an exit strategy to ensure business continuity and security when employees leave.
Protect your business with expert legal advice
If you’re unsure whether your contracts are up to scratch, getting legal advice now can save you a major headache later. At Jamieson Law, we help businesses draft clear, enforceable confidentiality and non-compete clauses that stand up to scrutiny.
Need to review your contracts? Get in touch today to ensure your business is legally protected when employees move on.
