Non-competition clause is key when hiring staff

Question: “About two years ago, I hired an ICT officer on the following terms: a six month internship and upon successful completion of internship, he would be permanently employed as an innovation officer. His role was to (under my supervision) develop various software concepts into prototypes. We would then market these. Last month the innovation officer abruptly resigned and took with him some of the software that I had trained him to develop. I have since learnt that he now works for my competitor in the same capacity. They are about to launch three of the software products next month. The software are identical to what we were developing. Do I have any recourse against him?”

Answer: The above is a very common occurrence in the field of innovation and the creative sector. It is a very unfortunate place to find yourself given that you have spent a lot of resources on training and developing your staff only for them to be poached. It is of course unreasonable to expect your staff to work for you for an indefinite term, despite the investment and training you have given them.

The question is how far you can go as an employer in “policing” the issue. You may or may not have a recourse depending on the circumstances of the case.

You may have a recourse if there is a contractual basis, an infringement of intellectual property or if it constitutes unfair trade practices. An example of unfair trade practices, is when your competitor colludes with your staff to “undermine” you. For example a few years ago in the telecoms market there were allegations that some market players were bribing competitor’s staff to leak confidential information to them.

The telecoms sector is a sensitive market where a lot of innovation takes place. An innovation leaked to a competitor before intellectual property rights are secured can be devastating. In such a case, the employer definitely has recourse against his employee. All these are actionable.

A second cause of action available would depend on the nature of the contract you had with your employee. This is why it is important to carefully draft employment contracts taking into account unique circumstances. If there was a non-competition clause in the contract then you will have recourse. A non-competition clause is a clause that stops the employee from working for your competitor for a given time frame.

In one such case (whose details I will not cite here due to the sensitivity of the case), an employer was able to successfully get a temporary injunction stopping its former staff from working for a competitor. It cited the non-competition clause in the employment contract. The fact that temporary orders were given means that non-competition clauses are actionable in Kenya. Where one is employed in a sensitive position such as innovations then it may be prudent to have a non-competition clause.

Your third claim could be breach of confidentiality. There is a reasonable level of confidentiality that is expected of employees working for you. This upholds the principle of employee fidelity. When an employee breaches this expectation during the course of duty or even afterwards, then it is termed to be a breach of confidentiality. Confidentiality does not have to be specifically contracted for, though it is wise to draft it. If you can prove that there was a breach of confidentiality then the same ought to be actionable.

The old adage prevention is better than cure applies. It is important to thoroughly draft your employment contracts to secure your rights as an employer.