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The resignation and exit of a senior level employee can pose many threats to your company or business. When an executive departs, commonly encountered issues include the failure to return goods or IP, the actual or threatened poaching of staff or clients, and the disclosure of your valuable trade secrets to third parties.  But there are practical steps that you can take, before and after the employment relationship, to protect your company from such threats. So, what can you do before and after a senior employee resigns?

Employment Agreement and Deed of Restraint

Employers should take care to document their legal obligations comprehensively and clearly from the outset of the employment relationship. It is equally important to note that, particularly with restraints, there is no ‘one-size fits all’. This should be customised depending on the employee’s role, remuneration, the level of client contact and the industry in which your business operates.

Register of Company Property

It’s simple. And it works. Every time your company acquires an asset, add it to the register. Then make a note of whenever you provide the asset to an employee or third party. Extra points if you have that employee or third party sign a receipt when they hand the item over. You may be thinking that such a register seems like an incredibly simple idea. But it will also be invaluable should an outgoing employee claim they don’t have that laptop, or phone, or manual.

Right to Inspect Computers and Software

Looking at the exiting employee’s outbox can assist in determining whether or not they pose a threat to your company. It is paramount that you confirm you have a right to do so, either by way of general law or a specific contractual provision.

Have a Formal Exit Interview

The Employment Agreement should set out the termination obligations about restraint/non-compete, confidentiality, returning goods, and ongoing communications. Having an exit interview will assist you going through each of these obligations with the employee and having him or her confirm their understanding of each one.

Provide the Employee a Formal Notice

You should then follow up the exit-interview with a written notice. Provide a clear and succinct itemisation of the ongoing obligations the employee owes, and ensure that he or she understands that your company takes these ongoing obligations seriously. The notice should also set out for the employee that you have satisfied your obligations with regards to payment etc.

Conclusion

If you are concerned about the actions of any outgoing executive employee, you should not simply sit and do nothing – waiting for the worst to happen. An employment lawyer will be able to identify your legal rights and the methods available to you to enforce them. Should you have any questions or require advice from one of our experienced employment lawyers, please get in touch on 1300 544 755.

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