Recruitment without tears
The perfect candidate accepts the sales director job at slightly under the salary for which you had budgeted. She had told you at interview that she had a lengthy notice period but she expected to be released from it once she resigned. You took her at her word. Champagne all round.
The next thing you know is that you receive an injunction from her ex-employer ordering you to refrain from taking your new sales director for twelve months. So what should you have done differently?
* Notice period: The ex-employer may sometimes release the employee earlier than the end of their notice period, but this is not a foregone conclusion. While no ex-employer can force an employee to work during their notice period, the executive may have a garden leave clause in her contract allowing the ex-employer to keep the executive 'on ice' at home for the whole of the her notice period. Garden leave clauses of six months are not uncommon. If there is a lengthy notice period, you need to allow for it in the recruitment process.
* Post termination restrictions: Even supposing the executive can start immediately, you need to check carefully if she is precluded from working in her field and, if so, for how long. There is a general misconception that clauses preventing, say, the solicitation of or dealing with customers are unenforceable. This is untrue. The courts will enforce well-drafted covenants which protect genuine commercial interests and go no further than is necessary to protect such interests. This is particularly the case where confidential information is involved.
* Confidential information: One of the biggest messes that an executive can get themselves into is to swipe confidential information from their ex-employer. You should encourage all new employees to return such information. You need to learn to distinguish between confidential information belonging to others and skill and knowledge which an executive is allowed to put at the service of a new employer.
* Bonus clauses: Many bonuses once earned are only payable if the executive is both in employment and not under notice. If you are recruiting in the lead up to a bonus being paid, it is worth checking the terms of the bonus scheme to ensure that the timing of the recruitment does not cause the executive to lose out on the previous year's bonus.
It is good practice to ask to see a copy of the relevant parts of a new recruit's contract with their ex-employer. It tests the commitment of the new recruit and should avoid nasty surprises in the process.
Contributor: Meriel Schindler, head of employment group, Withers LLP
