Non-compete clause violation

As an employer you know that it takes a considerable investment in time and money to hire staff. You would like to make this investment because it brings a lot of benefits. After all, your employees are the engine that drives the business. To protect your company a non-compete clause (or covenant not to compete) is often included in a contract. This should prevent your investment from being lost if employees are taken over by competitors or that they go elsewhere with their precious knowledge and valuable customers.

This is even more difficult to detect when this restraining clause is breached abroad. Then help may be required. Such an agreement gives rights to you as an employer. We help you to protect these rights.

Case example

Carina (45): Since 2012, I have a recruitment agency near the German-Dutch border where Claus was one of my first employees. At the time I gave him a permanent contract with a non-compete clause. Competition is high in this industry and clients are often attached to their supplier’s contact. So you do well to have some arrangements made, just in case someone decides to continue his career elsewhere.

Because Claus is a good recruitment consultant, he had the biggest clients in his portfolio. Within the company I focus entirely on sales: bringing in new business and expanding current projects. Often I saw clients only a few times a year, while Claus had contact with them about their requests on a weekly basis.

This was his first job. I taught him the tricks of the trade and he turned out to be a natural talent. I knew he eventually would spread his wings and take a next step. Which, in my opinion, is a good thing. But when he was away for a while I noticed that there were clients holding off doing business. These were all companies where we provided staff for years and who suddenly didn’t seem to need people anymore.

That may happen once, but when a third client began to withdraw, I understood that this couldn’t be a coincidence. The common denominator in this case was Claus, who had all three clients under his wing. So my suspicion was that he still did that, but with another organization.

Because my company operates in the border region, I have both German and Dutch clients. On LinkedIn I have seen that Claus now works at one of our Dutch competitors. The same competitor where my clients went to from what I understood. His profile states that he has a job as a marketing assistant, but I seriously doubt that. He has no background in that area and he has always expressed his desire to grow in the recruitment industry. Therefore I believe that, despite the non-compete agreement, he is working in a similar position at another company.

It’s very difficult for me to find out whether he is doing the same job with the competitor now, serving my clients, and whether he is indeed going against the non-compete. I’ve had contact with Claus who denied it. But for me, something is wrong here. I wish him the best, but not at the expense of my business.

Non-compete investigation

If an employee terminates his employment, he is obliged to comply with the restrictions contained in a non-compete agreement for a fixed period of time, if there is such an agreement. These restrictions differ depending on each agreement. The provision in the contract can be violated in various ways:

• A person carries out the same work at a new employer.
• A former employee works at a direct competitor.
• The employee goes to work in the same region doing the same activities.
• Someone starts with the competitor or a similar business on his own account before the agreed term.
• The former colleague who is taking clients with him after his departure, which is a violation of the non-solicitation clause.

It is not always easy to determine whether any of the above situations apply. An investigation carried out could be a solution.

We can help

Borderless Investigations finds out where a former employee works, in which position and what tasks he performs, and whether are clients taken away. We also advise on the steps you can take if there is indeed a violation of the non-compete clause.

Contact us for a free consultation to discuss what we can do for you.