Should firms bar ex-workers from new jobs?
The law acknowledges that freedom of career change may be curtailed in certain instances to protect the legitimate and proprietary interests of an employer. PHOTO | POOL  Summary Employers are increasingly urging employees to enter into contracts barring them from working for a competitor or set up a competing enterprise once the employment relationship is severed. The primary legislation that comprehensively deals with contracts in restraint of trade is the Contracts in Restraint of Trade Act. Section 2(1) of the Act generally deems such contracts valid and enforceable save for where the contract is unreasonable or contrary to public policy. Employers are increasingly urging employees to enter into contracts barring them from working for a competitor or set up a competing enterprise once the employment relationship is severed. Such contracts are referred in law as contracts in restraint of trade, restrictive covenants or non-compete agreements. From the onset, it is crucial to point out the law has always guarded jealously the rights of persons to pursue their careers. The right to pursue gainful employment is, for instance, firmly underpinned in Article 46 of the Constitution. At the same time, the law has acknowledged that this freedom of career change may be curtailed in certain instances to protect the legitimate and proprietary interests of an employer. The latter position has, however, had a step-mothers affections with our courtroom Daniels. In Kenyas legal architecture, the primary legislation that comprehensively deals with contracts in restraint of trade is the Contracts in Restraint of Trade Act. Section 2(1) of the Act generally deems such contracts valid and enforceable save for where the contract is unreasonable or contrary to public policy. The test of reasonableness imposed by Section 2 of the Contract in Restraint of Trade Act is fourfold. That is, the contract must be reasonable in respect of its geographical location, duration, scope and must not be contrary to public policy. Such restrictive covenants are manifestly harsh and barbarous. Fortunately, the rigour of the law has curbed such overweening exercise of power by employers. The emerging jurisprudence in the courts and arbitral tribunals has tended to uphold the right of an ex-employee to pursue their future economic ambitions. While this jurisprudential stream is readily welcomed by the earners of wages, it is sometimes devoid of the equally important interests of the owners of capital. It is well acknowledged that technology and data are now part and parcel of nearly every workplace. On any commonsense view of this subject, it behoves employers to take measures aimed at protecting their proprietary information and trade secrets. Unfortunately, advancing only an employee-centric position in interpretations of restraint-of-trade contracts makes the whole argument disappear into an academic cul-de-sac. To cure this malady, insights from a practice adopted widely in New Zealand and the United Kingdom show they have adopted a protectionist measure known as gardening leave. It is a typical contract in restraint-of-trade except that an employee is remunerated for a period they are barred from engaging in a similar job after resignation or termination of the employment relationship. Some employers might also opt to allow the employee work remotely or have their duties significantly reduced during the gardening leave period. The raison d'tre is to keep the employee out of employment a long enough period that either their grasp of the proprietary information wanes or becomes irrelevant. Despite the obvious benefits that gardening leave clauses can have to an employer, such contractual provisos also bring financial burden upon an employer who has to remunerate an ex-employee who is not working. Evidently, this context might invite criticism with unsparing vigour by employers. Nonetheless, I make the case that an employer who values their proprietary information or trade secrets will go at great lengths to protect it. Further, by any common judgment of a thinking mind, it is utterly unreasonable to bar an employee from pursuing greener pastures after severing ties. AMEND LAWS  In deference to the emerging and plausible sentiments in other jurisdictions regarding restrictive covenants, it is high time we amended our laws accordingly. By no stretch of imagination could the Contract in Restraint of Trade Act, a legislation that commenced on December 31 1932, address the technological scheme of things of the Gen Z. However rosy the past, it is time to take wings into the future of work and disembarrass ourselves of short-term perspectives. In sum, gardening leave clauses, when viewed in their general tenure and substance, produce a win-win result when employment relationships are terminated. Sunday Memba, Advocate of the High Court of Kenya