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Piqued by an Employee’s Departure? Don’t Do Anything Hasty!

The departure of trusted workers who set up in competition is a frequent source of fury to employers. However, as one High Court libel case showed, the sensible course is to take legal advice rather than resort to hasty action.

The case concerned two men who were formerly employed by a company that produced safety products for commercial vehicles and machinery. After leaving their jobs, they chose to pursue other business opportunities in the same market.

An employee of the company sent an email to a number of its customers, contacts and suppliers. Although the two men were not named, they were well known to many of the email’s recipients. They were identifiable as the targets of accusations that they were guilty of theft and fraud against the company. The email, which was likely to have achieved a wide audience via a grapevine effect, also stated that a police investigation was ongoing from which actions would arise in due course.

After the men launched libel proceedings, the company accepted that the allegations made in the email were untrue and defamatory. It agreed to pay compensation to each of them and offered sincere and unqualified apologies for the distress and embarrassment that they had endured. The company also agreed to pay their legal costs and, in order to minimise the harm to their reputations, to circulate its retraction of the allegations to all those who had received the email.