Introduction to Springboarding
“How to stop your former employee from taking unfair advantage over your business post-termination. Springboarding occurs when a former employee, partner, contractor, agent, or director, immediately after the resignation or termination, decides to set up the same business, within the same geographical area to compete with their former employer, contact the previous employer’s customers, and poach their existing staff using the inside knowledge gained during their tenure with the employer in order to gain an unfair advantage over the former employer“.
In this serious of articles, we will explore how employers can protect their businesses from springboarding and employees, directors, agents etc. can safely embark on a new business venture without breaking the laws of employment, privacy, and competition.
Read Time: 3 minutes
What is on this page?
- Introduction to Springboarding
- Post Employment Restrictions for Springboarding
- Benefits of non-competing contracts or terms
- Alternative to Non-Competing Agreements
- What Would you do next?
Post-Employment Restrictions for Springboarding
Generally, the employers will incorporate conditions within the employment law which imposes post-employment restrictions on the employee. Employer and employee can also agree on a separate non-competing agreement which will be in addition to the employment contract and employee handbook.
The terms incorporated in the employment contract or non-competing agreement will impose post-employment restrictions on former employees from working for competitors or defined groups of competitors for a specified time. It also covers things such as;
- Trade connection
- Trade secret and confidential information
- Contacting existing clients
- Poaching existing employees
- Setting up the same business within a certain area
In case of a potential dispute the burden of proof is on the employer to prove the infringement, hence It is incumbent on the employer, firstly to fully understand the scope of the restrictions on spring boarding and secondly to ensure that the rights and obligations and terms are reasonable and are not too wide. It is important to note that an unreasonable or wide condition will nullify the whole non-competing section or the stand-alone agreement.
Benefits of non-competing contracts or terms
Non- competing agreements or terms protect the employer’s standing within the business sector. It offers greater assurance that the company’s intellectual property, rights, confidential information are intact. Strategically it ensures that the proprietary information will not be made available to or used by a competitor.
Alternative to Non-Competing Agreements
There are other methods to restrict a formal employee other than having non-compete clauses within an employment contract, such as:
- Legal agreements not to solicit clients
- Confidentiality agreement
The doctrine of Inevitable disclosure
The doctrine of inevitable disclosure gives rise to the implied condition that the former employee will not disclose the trade secrets or inside knowledge with the competitor. The doctrine is invoked after an employee who is not bound by a non-compete agreement joins a competitor. The former employer may assert that there is an implied non-compete term because the former employee will unavoidably be deemed to disclose sensitive information.
Are you thinking of safeguarding your business interests? Now you can create all necessary documents with our step by step guide. This includes documents such as non-competing agreements, non-disclosure agreements, employment contracts. Employee handbook and many more documents.