This Week’s Big Question: Can restrictive covenants stop staff taking clients when they go? - Four board members quit Shandwick last week to form the Hogarth Partnership

JANET EDMOND

JANET EDMOND



Ethical Strategies



’Yes they are a deterrent. However, where the relationship between a

client and the individual consultant is particularly strong, these

issues need to be worked through. Restrictive covenants can be amended

so that all three parties - client, agency and individual - can reach an

amicable agreement. It reflects the importance of honesty and trust

between senior consultants and managers at the agency.’



JILL COOMBER



Grant Butler Coomber



’They are deterrents in messy situations because of the time and cost

involved in dealing with a court injunction. In your set-up phase you

should be focusing on the quality of the new company instead of fighting

in court. However, if you’re good, new clients will come on board

regardless.



You don’t need to take your old clients with you to be successful

quickly.’



JANE HOWARD



Leedex Public Relations



’It depends entirely on how contracts are drafted and there is no one

way of doing this. What tends to happen is that the broader the

covenant, the less applicable it is. You have to be realistic and a lot

depends on the client relationship. Generally, agencies are unwilling to

upset big, well-resourced companies. It’s not a question of morality,

it’s a question of law.’



PAUL TAAFFE



Hill and Knowlton



’No, but they’re the only deterrent that one has. They’re only effective

when legally sound, tending to be either too understated to be of any

use or too overstated to stand up legally. The real issue is the

attitude of the employer. If it is prepared to pursue the case

vigorously it may not gain, but it does send out a powerful message.

Once lawyers reach for their guns it’s usually too late for both sides.

Their real value is enabling both sides to negotiate a compromise.’



KATE BRITTIN



Employment solicitor at Lewis Silkin



’Non-solicitation covenants are so difficult to prove that they’re not

very helpful. Unless the individual admits soliciting, that information

has to come from the client, and agencies are usually unwilling to get

into battles with clients. But non-dealing covenants - where an

individual cannot act for a client - can be a good deterrent as an

individual will usually have fewer resources than the agency and fear

the expense of fighting an injunction.’



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