Fresh Business Thinking’s legal expert, Brian McLelland, answers your legal questions — in this issue, some guidelines on employment law and hiding from extremists
An independent, non-employed agent has begun to work on behalf of another business and has started to divert my business leads to them since he says they are paying him higher commission. He says we cannot terminate his contract without fully paying him future commissions.
Is he right?
No, as an agent he owes you as principal a duty of good faith, and diversion of your business to a competitor is a clear breach of this. You could sue him for damages for lost business and could carry out discovery on all income he has obtained from this third party at your expense to quantify the loss. Further, you could subpoena the third party to provide details of payments made to this agent in order to obtain specific information pertaining to your loss.
The above presupposes there was nothing onerous in any agency agreement you might have with him. It is always best to have an agency agreement professionally drafted and reviewed, as disputes evidently will exist as to what, if any, terms subsisted for an oral contract.
A court would decide which of the two witnesses it believed was more credible — the honest businessman/woman who gives a poor performance on the day in the witness box will have difficulties. It is preferable to have something in writing.
Getting a good agency agreement drafted could act as prevention rather than cure for other agents perhaps wishing to break ranks. Make sure this would cover the future conduct of agents post-termination in terms of preventing abuses of the customer lists, non-solicitation of customers and return of company property, for instance.
In the first instance, you may like to write to him, reminding him of his legal duties as an agent, together with a warning not to breach such duties in future.
I’ve just discovered that one of our part-time homeworkers operates another non-competing business he didn’t tell us about at interview. We fear this may detract from his efforts for this company and know he’s been answering other business queries during our own office hours. Can we do anything?
Flexible teleworking in a virtual office has its benefits but also its challenges as managing staff at arm’s length becomes even more important. You have to start at the beginning: a clear job ad and person spec, and a good set of interview questions aimed at filtering out the chaff. Good interview notes retained after the event can provide evidence of falsehoods and give possible grounds for immediate dismissal.
Fundamentally, the employee should have signed a statement confirming the information he provided at the interview was full, complete and accurate, failing which he accepted instantaneous termination for gross misconduct. You do not say if this occurred here or if his contract restricts any other employment.
With or without a signed contract, an implied duty of good faith is owed by the employee, so you could challenge him and invite him to lie to his employer, which would give you grounds to dismiss him summarily.
Alternatively, you could simply dismiss by way of notice — giving the statutory minimum of one week’s notice, without getting into dispute over whether or not his actions constituted gross misconduct. If he has been with you for less than a year, he would not have any rights to bring an unfair dismissal claim at Employment Tribunal. If he has been employed for longer, he would ordinarily have to bring a claim within three months of the date of dismissal.
We’ve got a great opportunity to tender for a pharmaceutical company, but they’ve recently been targeted by animal rights extremists. We’re concerned our own officers could become targets — is there anything we can do?
You are right to be cautious here, following some well-publicised horror stories. Unfortunately, while the law helps to a point, it is limited — despite Companies House being able to remove certain company information from public record in the form of a Confidentiality Order.
To apply successfully, you’d need to provide evidence of extremist website threats, abusive emails, telephone calls, faxes or letters, newspaper articles of incidents, police incidence reports or other third-party risk reports, much of which is ‘an after the event response’. Alternatively, you would have to rely on a police assessment — but there is no guarantee of the police making a correct assessment.
It’s also worth noting that, even if it is granted, the order is not retrospective. While existing addresses of company officers will be removed from the current record, anyone can obtain a copy of previous registers which would still contain the information, so the risk is still there.
For this reason, many companies servicing ‘at-risk’ clients are now formed and registered overseas, where better protection may exist to protect the anonymity
Other non-corporate bodies such as sole traders and partnerships could consider using the services of a holding office — in effect a mailbox — to preserve their privacy.
Brian McLelland is director of www.business-lawyers.org