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Employee competition in the time of remote working

16 July 2020

For many employers recent priorities have focussed on the practicalities of transitioning their workforce to homeworking, taking advantage of the government’s furlough scheme, and making cost savings. Another important consideration is the need to protect businesses from unlawful employee competition during and in the period following the lockdown. We have seen a significant increase in this activity in recent weeks and this article sets out practical steps for employers to follow.

The danger

We expect to see a flurry of recruitment activity and resignations around the time when the lockdown ends, for a variety of reasons:

  • Employees may have decided to move before the lockdown was imposed and may simply be waiting for it to end before resigning;
  • Some businesses may consider that aggressive recruitment from competitors is key to their survival or a means of ‘finishing off’ weaker competitors;
  • Employees may have concerns about the health of their employer’s business and perceive that their employment may be more secure elsewhere.

In the meantime, with so many employees working from home, employers may have less visibility over their employees’ activities. This gives rise to the risk that employees may take advantage of the opportunities this presents to:

  • misuse confidential information;
  • encourage colleagues to move to a new employer;
  • prepare to divert clients to a new employer.

The problem may be accentuated if, when the employer comes to suspect that there has been unlawful activity, the employer’s practices and policies mean that it cannot lawfully interrogate employee’s communications and/or devices. Assuming that an employer has appropriate policies in place, it will likely be lawful for it to (i) inspect emails and messages sent by an employee using the employer’s systems and (ii) interrogate devices owned by the employer and provided to the employee for the performance of their duties. The position is, however, more difficult if employees use personal communications systems or devices to perform their duties.

Another potential danger of reduced visibility over employee’s activities arises if, in due course, an employer wishes to enforce client non-solicitation covenants which bite only on clients with whom the employee has had material dealings during a ‘lookback’ period, but the employer is unable to prove that such dealings took place during the lockdown period.

What can employers do to protect themselves?

  • Employers should consider whether there is anything they can do to mitigate the risks associated with allowing staff to access business sensitive information remotely. Is access to business sensitive information appropriately limited to those who really need to access it? Do the employer’s policies dealing with data security need to be revised so that they address the issues associated with homeworking? Should any relevant policies be brought specifically to employees’ attention? It obviously makes sense to consider these issues in tandem with any homeworking-related data security issues arising under the General Data Protection Regulation and the Data Protection Act 2018. For further information on mitigating the security risks of homeworking please see our article here.
  • If the use of personal communications systems/devices is unnecessary while staff are working remotely then it might be sensible to ensure that staff understand that the use of personal communications systems/devices for work constitutes misconduct (in the absence of express permission). This reminder could be issued as part of health and safety guidance you may issuing on homeworking.For more information about employers’ obligations during homeworking see our article here.
  • If the use of personal systems/devices while staff are homeworking is unavoidable, consider whether there are any steps which can be taken to improve visibility over staff activities. For example, it may be sensible to enforce more strictly the need for staff to update existing reporting systems with details of their activities (or to require staff to provide updates more frequently and in greater detail). Also consider IT solutions that can be implemented remotely requiring employees to log in to track activity during the working day.
  • It may be wise to seek advice on whether existing staff policies need to be revised so as to maximise the employer’s ability to inspect/interrogate personal communications systems/devices. This applies whether the use of personal communications systems/devices is permitted or not.
  • If you are planning to roll out updated employment contracts as part of your response to the pandemic, consider whether to refresh and update key clauses covering duties during employment, confidentiality, notice periods, garden leave and post-termination restrictions.
  • Employers should be extra vigilant for signs of recruitment activity. In some respects, this will be more challenging where staff are homeworking. For example, conversations with recruiters can now happen much more freely; and it is much more difficult to identify the sort of ‘unusual’ behaviour which is often the sign that a manager is acting as ‘recruiting sergeant’ (for example, unusual offsite meetings will presumably not be taking place during the lockdown). However, if the lockdown continues for a lengthy period, new ‘normal’ patterns of behaviour will arise and it may therefore be possible to identify (for example) unusually high levels (or timing) of communications between certain team members.

For further guidance on responding to coronavirus and to download our FAQS for employers, please visit our dedicated Covid-19 hub.

 

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