Home care providers vulnerable to staff poaching clients

In the disability and home care sector, employees naturally develop strong rapport with the clients they care for. However, there is an increasing trend of employees leaving their employers to set up their own businesses or to work for other providers, often taking their previous employers’ clients with them.

Providers are already under increased pressure with the rise of gig economy competitors and an overall workforce shortage. It can be particularly damaging to a home care or disability provider when a former employee, whom the provider has invested time and resources training and has introduced to clients, poaches their clients.

Employers have several steps they can take to deter such conduct. One of these steps is including a well-drafted restraint of trade clause in an employee’s contract. Employers should also ensure there is a comprehensive confidentiality clause in their contracts to ensure their commercially sensitive information is protected, even after the employee has left the business.

What is a restraint of trade?

In an employment context, a restraint of trade is an employment contract clause which prohibits an employee from engaging in activities that would damage the employer’s business interests after they leave their employment.

A restraint clause may prohibit a former employee from working for a competitor, encouraging clients or other staff to leave, or interfering in their old employer’s relationships with stakeholders.

If the former employee breaches their restraint, an employer may seek an injunction to prevent the conduct from continuing, make a claim for loss suffered, and in some instances may also seek that the employee or relevant business hand over the profits made.

This is an excerpt of an article published by Russell Kennedy Lawyers, and has been published with permission.