problems with employee who has resigned

[scoobydoo]

A very brief history

young man . worked through company to sales - very good -offered directorship and a share of the company -everything hunky dory

He comes in and totally out of the blue resigns and goes to set up a new company with a competitor- ok thats business.

two problems


He logged in on an evening before leaving and wiped out company records ( his emails for last month) and took details of sales contacts ( he has admitted he is going to use these in his new business).

Secondly - he had been overpaid on commsiion by a lot of money - he was aware of this as although the commsiion agreement was verbal at one stage - there is an email confirming he was aware of the way commission was calculated.

Am I right in assuming there should be n problem in getting the overpaid commission back.?

Is there anyway that there can be some sort of "come back" for taking company contacts for use in the new business ?

He has been invited in to discuss taing company records - but so farhas refused.


There is a lot more to this but I have tried to keep it simple:tinysmile_grin_t:

Thanks

[Sapphire]

Re: problems with employee who has resigned

Hiya I'm not sure about the money side but I would ask this, did he ever sign a non-compete agreement ?

[scoobydoo]

Re: problems with employee who has resigned

Hi sapphy , hope you are ok.

This is my husbands company -but he thinks in his contract there is something about the ownership of company information.I am going to get a copy of the contract to have a look myself.

[Sapphire]

Re: problems with employee who has resigned

Hi Scooby lovely to see you again. Yes good idea, have a good read of the contract, there may be something in there you can go on.
We have non-compete agreements with all the staff, ok they are not exactly watertight if challenged, but they do have the effect of making the staff think twice about breaking that agreement.

[des8]

Re: problems with employee who has resigned

Possibly the Theft Act 1968 Chapter 60 applies as he seems to have dishonestly appropriated property (definition includes intangible property)
Sales contacts would be classed as commercial property i.e. property with economic value.
As he is leaving he has no right to this information except in so far as it is in his memory. It would be wrong to take a hard copy of a list of commercial contacts)
Also possible intellectual property theft by the illegal copying of written material.

Unless he has some personal relationship with these contacts I would consider contacting each one of them explaining that the employee had left and no longer worked for you.

If your OH has fidelity insurance, contact insurers now, advising them of possible loss.

[labman]

Re: problems with employee who has resigned

On a purely technical point re the deleted records, two things:

1. Did they not have all systems backed up (if not, something to plan for in the future?)

2. Deleted information is easily recovered nowadays. I can do it on my home computer using a free program so I'm sure the information could be recorded. Whether personal emails can be read by someone else is another matter.

[scoobydoo]

Re: problems with employee who has resigned

Hi Labman

They have recovered the information - it is more really to see if deleting company information and taking sales contacts would be a viable reason for dismissal rather than paying his last salary . They know when he went in and have a record of what information he looked at - but of course that may not be sufficient evidence as he was technically " employed" at the time. He has been invited in on several occasions to findout why he came back late at night to access the files but has refused all discussions. We are assuming the overpayment of commission in error will be easier to resolve.

[labman]

Re: problems with employee who has resigned

What evidence do you have of him taking details of sales contracts?

Was he permitted, under his contract, to delete the information he did?

Most contracts for sales roles have some sort clause to stop employees taking business with them if they resign - I assume this is what Sapphy refers to as the non-compete agreement. It's definitely worth checking that. :beagle:

[des8]

Re: problems with employee who has resigned

Whilst there may be clauses in contracts aimed at stopping migration of business with the salesman, in practice it can be difficult to prevent entirely. When I was a broker at Lloyds a lot of business was generated and kept by personal touch. When moving firms it was considered courteous to inform clients you were moving and say goodbye. If you were good at your job a number of clients would follow..... not quite the same perhaps but does allow for the salesman to defend his position with "Honest gov, he insisted on moving his business with me"

[scoobydoo]

Re: problems with employee who has resigned

Whilst there may be clauses in contracts aimed at stopping migration of business with the salesman, in practice it can be difficult to prevent entirely. When I was a broker at Lloyds a lot of business was generated and kept by personal touch. When moving firms it was considered courteous to inform clients you were moving and say goodbye. If you were good at your job a number of clients would follow..... not quite the same perhaps but does allow for the salesman to defend his position with "Honest gov, he insisted on moving his business with me"

totally agree - I think it is proving it that is the problem. They have decided not to pursue the dismissal avenue but are going to fire a warning shot accross the bow that if he obviously gets a job through using their contacts they will pursue the matter - plus they are going after him for the overpaid ccommission as they have concrete evidence he know how much he was supposed to get . So I guess they will have to go to small claims court. He will end up owing them £9000.00 ( probably gone into setting up the new business.

Thank you for your input guys and girls - oh the joys of running a business.!

[labman]

Re: problems with employee who has resigned

totally agree - I think it is proving it that is the problem. They have decided not to pursue the dismissal avenue but are going to fire a warning shot accross the bow that if he obviously gets a job through using their contacts they will pursue the matter - plus they are going after him for the overpaid ccommission as they have concrete evidence he know how much he was supposed to get . So I guess they will have to go to small claims court. He will end up owing them £9000.00 ( probably gone into setting up the new business.

Thank you for your input guys and girls - oh the joys of running a business.!

Surely this is going to VERY hard to prove. Aren't other companies at liberty to choose for themselves who they use for their services? What exactly would they pursue him for, or is this all in the compete clause? :beagle:

[scoobydoo]

Re: problems with employee who has resigned

Surely this is going to VERY hard to prove. Aren't other companies at liberty to choose for themselves who they use for their services? What exactly would they pursue him for, or is this all in the compete clause? :beagle:

Yes there is a clause in his contract and he has admitted in writing that he has taken all details of contacts and intends to use them. However I agree with you it will be hard to prove. I think that they have come to the conclusion that they will have to let go and move forward but they wanted to try and make him think twice about doing anything to obvious. But of course there are other ways in business that they may be able to legitimately make him work very hard for any business he tries to take from them .:tinysmile_grin_t:

[labman]

Re: problems with employee who has resigned

Indeed, any business would be foolish to just roll over and let its best clients be taken from them. :beagle:

[charitynjw]

Re: problems with employee who has resigned

This is quite a tricky one.
While it is quite legal for an ex-employee to canvass customers of the previous employer (Faccenda Chicken Ltd v Fowler [1986]), if it involves trade secrets & there is a restraint of trade clause, ex-employee could be in trouble.
Also, was he an ex employee when he committed the dastardly deed; if he was still officially employed, he has breached the implied fidelity & trust part of the employment contract, potentially leaving himself open to a claim for damages. (Wessex Dairies Ltd v Smith [1935], Roger Bullivant Ltd v Ellis [1987])