UK Law and Practice Contributed by: Phil Linnard, Philippa O’Malley, David Rintoul and Clare Fletcher, Slaughter and May
An employer may be found vicariously liable for an employee’s tortious act if it was committed in the course of the employee’s employment or is closely connected with what the employee was authorised by the employer to do. Under the Civil Liability (Contribution) Act 1978, an employer may be entitled to seek an indemnity from the employee should they be forced to pay damages in respect of the employee’s tort. The court will allow such a claim if it is “just and equitable” to do so – but in practice, such claims are very rare. Non-compete clauses in UK employment contracts are only enforceable if the former employer can show that the clause goes no further than is reasonably necessary to protect one of its legitimate business interests, which include its trade secrets, trade con - nections and workforce stability. Non-competes need to be drafted as precisely and narrowly as possible to maximise the chance of enforcement, and should only restrain activities of a type, location and duration that would likely cause material damage to the former employer’s business. An employer is not obliged to make any payment to a former employee in exchange for being bound by such restrictions. Non-competes are enforced by way of an applica - tion to the High Court for an injunction to restrain the ex-employee’s activities. The Employment Tribunals have no jurisdiction to hear restrictive covenant dis - putes. The Court will decide on the enforceability of the covenant and whether an injunction is justified, balancing the potential impacts on the employer and the employee if the injunction is (or is not) granted. 2.2 Non-Solicits Non-solicitation clauses are designed to prevent for - mer employees from approaching the former employ - er’s customers or suppliers with a view to obtaining their business, or employees with a view to employ - ing them. As with the non-compete clauses, any non-solicit clause will only be enforceable if it goes no further than is reasonably necessary to protect 2. Restrictive Covenants 2.1 Non-Competes
the former employer’s legitimate business interest(s). Non-solicits will also need to be carefully drafted, and usually limited in scope to only prohibit solicitation of contacts with whom the former employee had mate - rial dealings in the period leading up to termination of their employment. Non-solicits are generally considered less restric - tive than non-competes and may therefore be easier to enforce, although the former employer will need to adduce evidence that solicitation has actually occurred. An alternative approach would be to use a non-dealing clause, which would not require solici - tation by the former employee. However, since non- dealing clauses are more restrictive than non-solicita - tion clauses, they are also harder to enforce. 3. Data Privacy 3.1 Data Privacy Law and Employment Employers have obligations to their workers under the Data Protection Act 2018 (DPA) and the UK General Data Protection Regulation (GDPR). Employers should also follow guidance published by the Information Commissioner’s Office (ICO) to ensure compliance with their obligations under DPA and GDPR. Employ - ers who do not comply with their DPA and GDPR obli - gations can face civil and criminal penalties. Employers are “data controllers” for the purposes of DPA, on the basis that an employer is ultimately in charge of and responsible for the processing of its employees’ data. Employers must have a valid legal basis for process - ing employee data under Article 6 of the GDPR. Some of the grounds typically relied on by employers for processing employee data are that the processing is necessary for: • the performance of a contract to which the data subject is party – eg, processing an employee’s bank details for the purposes of paying them; • compliance with a legal obligation to which the controller is subject – eg, processing an employ - ee’s personal details for tax purposes; and
694 CHAMBERS.COM
Powered by FlippingBook