Business protection remains a priority for Channel Islands businesses in 2024, says leading law firm

New data from leading Channel Islands firm Walkers’ latest employment law conference has found a growing focus from companies on safeguarding clients and sensitive information.

In a poll of over 150 senior leaders and HR professionals attending the event, the results revealed employers have a sharp focus on post-termination restrictions and intellectual property (IP) provisions in the months ahead.

The key findings include:

• Client protection is at the forefront for businesses, with 63% of Jersey employers and 57% of Guernsey companies including non-solicitation of clients in their contracts.
• 80% of Jersey and 82% of Guernsey businesses do not distinguish between trade secrets and confidential information in their contracts.
• While many businesses have reviewed post-termination restrictions within the last 1-3 years (55% in Jersey and 41% in Guernsey), a significant number - 24% in Jersey and 29% in Guernsey - haven’t updated these critical clauses in over three years.

Sarah Ash, head of the Channel Islands Employment group, said: “These findings show that while businesses are taking steps to protect client relationships and sensitive information, there are clear gaps when it comes to defining and securing trade secrets, confidential information and intellectual property.”

“With so many businesses overlooking these sections of their contracts, the blurred lines leave companies vulnerable. Any business owner worried about leaving proprietary information unprotected should speak to a legal expert for advice.”

Walkers' employment law experts also warn that while Guernsey and Jersey companies largely have a handle on client protection, outdated contract terms still leave them potentially exposed to unnecessary risks.

Daniel Read, head of the Employment team in Jersey, commented: “It’s concerning to see that nearly a quarter of businesses haven’t updated their post-termination restrictions in over three years. Given how quickly employment law is changing in the Channel Islands, this leaves employers dealing with ineffective protections that could lead to talent loss, failure to protect key client/supplier relationships and damage to the company’s reputation.”

“Thankfully, there are simple strategies and processes that Channel Islands companies can put in place to ensure regular reviews of contracts go ahead. Businesses should always get employment law advice if they haven’t updated their contracts recently.”

Danielle Brouard, Senior Counsel in Guernsey, said: “If an employee breaches the post-termination restrictions in their former contract, the new employer can find themselves liable for inducing the breach of contract. Employers should always ask new joiners for a copy of any post termination restrictions in their former contract to spot and mitigate any legal risks.”

“It can be helpful to get legal advice on the impact and likely enforceability of any restrictions. If a new employer receives legal advice that the covenants are unlikely to be enforceable, they should be able to rely on this advice to defend any legal claims.”

Walkers’ employment law teams in Jersey and Guernsey are on the front lines. With a focus on helping businesses protect their most valuable assets - clients, employees, and intellectual property - the firm continues to provide high-quality, tailored guidance to Channel Island businesses.