Introduction

1. It does not automatically mean that the employee’s obligations to his/her employer have concluded once an employee leaves an employment relationship with the employer. Employers may restraint or restrict their employee’s conduct after the termination of employment by inserting certain clauses in the letter containing the Offer of Employment or the Letter of Appointment.

Confidentiality, Non-Competition and Non-Solicitation Clauses

2. The employer may restrict or restraint their employee’s conduct after the termination of the employment contract by inserting the following clauses in the Offer of Employment or Letter of Appointment: 

a. A confidentiality clause prohibits an employee from using or disclosing the employer’s confidential information during the employment as well as after the termination of employment;

b. A non-competition clause prohibits an employee after termination of his/her employment, for a period of time, from joining a competitor of the employer. A non-competition clause also prohibits an employee after the termination of his/her employment, for a period of time, from setting up a business in competition with the employer’s business;

c.  A non-solicitation clause prohibits an employee after termination of his/her employment, for a period of time, from soliciting or employing the present employees of the employer. A non-solicitation clause also prohibits an employee, for a period of time, from soliciting the suppliers and customers or clients of the employer after the termination of employment.

Conclusion

3. The above clauses in the employer’s letter containing the Offer of Employment or the Letter of Appointment may, during this uncertain economic environment:

a. Allow the employer to prevent their ex-employees from providing an improper advantage to the employer’s competitors from the information and/or knowledge the ex-employees may have gained while working for the employer; 

b. Allow the employer to maintain a stable workforce;

c. Provide the employer some protection from competition from their competitors and/or their ex-employees. 

4. Employers may have to consider inserting or amending their present letters containing the Offer of Employment or the Letter of Appointment with well-drafted confidentiality, non-competition and non-solicitation clauses so as to restrict or restrain the conduct of their employees after the termination of their employment.

By Dravida Maran, Lawyer

All information contained herein is intended only for your general information. It is not intended and/or should not be regarded under any circumstances as legal advice.