EDITORIAL: Why legal action is a last resort

Ludgate will consider itself unlucky not to have been able to secure an injunction against a former director in order to prevent her from setting up in competition for six months, or approaching any of the agency’s clients for a year, following her departure.

Ludgate will consider itself unlucky not to have been able to

secure an injunction against a former director in order to prevent her

from setting up in competition for six months, or approaching any of the

agency’s clients for a year, following her departure.



The agency apparently lost the case on a technicality: she had not

signed the new contract which specified those conditions and was

therefore bound only by the three month period of her previous

agreement. But experience suggests that contracts which attempt to

hamstring departing staff often come unstuck.



In many cases, the courts will rule that such restrictions amount to

restraint of trade and are therefore invalid. Even if the contract is

upheld, it is difficult to see what is gained by such a victory. Win or

lose, legal action is costly, time consuming and unpleasant for both

sides.



And if clients or staff are determined to leave, legal action can

usually only postpone the inevitable.



In a people business, clients’ loyalties often lie with the person or

persons in charge of their account rather than the consultancy.

Sometimes there is no option but to wield the big stick in order to

protect the interests of the business. But in many cases, agencies would

do better to consider negotiating a handover arrangement which allows

both sides to keep their dignity, leaves the client happy, and ensures

the agency holds on to the account for as long as possible.



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