Multi-sector recruiter Pertemps Network Group (PNG) has warned other recruitment agencies to ensure restrictive covenants agreed with employees are watertight so that client relationships are protected. 

The warning comes after PNG subsidiary Firecracker Talent successfully obtained a High Court injunction against former director Jane Rolls. Rolls worked at Firecracker until March 2014, according to her LinkedIn profile.

A statement from the company, released to Recruiter this morning (16 February), said the injunction was to prevent Rolls “from carrying out any activities that would prejudice the operations of the business”.

PNG says the dispute developed after it discovered Rolls had breached the terms of its restricted covenants.

The High Court awarded default judgment in favour of Firecracker Talent, granting it an injunction that was lifted last week when the two parties reached an agreement.

When contacted by Recruiter, Rolls said she could not comment because it could breach a confidentiality clause in her contract with PNG.

PNG’s statement said: “A restrictive covenant is typically a clause in a contract that prohibits former employees from soliciting or dealing with customers of the business following termination of the role by using knowledge of those customers gained during prior employment.”

PNG lifetime president Tim Watts said in the same statement that by airing this case, it was hoped “we can prevent other recruiters from falling victim to activities that threaten the professionalism of our industry”.

He added: “The majority of recruitment companies will feel they are protected by contractual agreements between themselves and the client. In most cases, they are. However, there is always a chance that business can be diverted and go unnoticed, highlighting the importance for recruiters to remain as close to each and every client as possible.”

No further information was available about the specific details of the case.

Legal help desks provided by recruitment industry trade bodies are receiving more calls about restrictive covenants, Recruiter was told.

The Recruitment and Employment Confederation (REC)’s director of policy and professional services Tom Hadley told Recruiter the REC’s helpline was getting “a lot” of calls and his advice was that such covenants need to be reasonable to be enforceable. For example, a non-solicitation clause might be enforceable for a term of six months, but probably not if it was for two years.

The Association of Professional Staffing Companies (APSCo)’s head of external affairs and compliance Samantha Hurley agreed, saying a restriction which was too wide-ranging, and not appropriate to a particular member of staff could be counter-productive.

She added that the “recruitment sector is one that is more exposed to potential damage from such a breach due to the information and relationship-based nature of the sector”.

For more on such covenants, see Recruiter’s ‘Starting your own recruitment business’ supplement, due out this week with the March issue of Recruiter.