There is an obligation upon employees, once employment with another employer has been terminated, to refrain from using any of the employer’s property. Once an employee has left the business, if the employee has physically made an effort to obtain information from their former employer and uses it, then there is a breach of the duty of loyalty owed by the employee. However, if the employee merely remembers such information as customer contacts and details, then this does not constitute a breach of duty.
The obligation to refrain from using a former employer’s property without authorisation can be included in restraint of trade clauses. Although employers do not own their customers (the customers can choose whoever they deal with), the employer does have an interest in the relationships formed between themselves and their customers. In determining whether a restraint of trade clause is necessary to protect the interests of the employer, consideration must be given to the role of the employees in the organisation and their seniority, the nature of the goods provided, how many of the total customers are dealt with by the employee and other factors. If there was a minimal role played by the employee in corresponding with the customers, then there is less need.
Staff connections are held in a similar regard to relations with customers. There can be anti-poaching clauses acting as restraint of trade clauses- restricting employees from poaching staff members of their former employer. Such clauses must be customised to cater for each individual employee. An example of this can be observed in the case of Aussie Home Loans v X Inc Services (2005), where an employee was unable to solicit, interfere with or endeavour to entice away any Aussie Home Loans employee or contractor for 12 months.
How can Prime Lawyers help you?
If you, as an employer feel that a former employee is using your property without authority, Prime Lawyers can help you. They will carefully consider your circumstances and provide you with guidance as to the best possible course of action available to you.