Real Estate Company Compensates Rival for Client Breach

A Queensland real estate agency has been compensated after a former star salesman who resigned to join a rival company was caught poaching clients and stealing confidential information.

NB Lawyers Principal and Director, Jonathan Mamaril, said the matter, which was settled out of court, highlighted the need for companies to have carefully drafted employment contracts in place for staff and policies directing employees about the specific use and handling of confidential information.

Mr Mamaril said the issue was particularly pertinent to the real estate sector where there was a great deal of movement of staff between companies and confidential client databases were crucial to the business.

“We recently had a matter in Queensland where a high performing salesperson resigned from their position and went to a direct competitor of our client the very next day,” he said.

“The former employee took specific client details and confidential information belonging to their former employer with the intent to provide this to his new employer.”

“The former employee provided a particular client to their new employer which was at the value of $14,000 in commission. However of greater importance to our client was the potential poaching of further clients with the confidential information the former employee had in their position.”

Mr Mamaril said in this case there was an employment contract in place with a reasonable restraint of trade clause which allowed NB Lawyers to draft a letter to the former employee and their new employer in relation to the breach of employment contract.

“After some negotiation the outcome was our client received a signed undertaking from the former employee that they would not use any further confidential information and the firm was compensated for the lost commission,” he said.

Mr Mamaril said in order for companies to better protect their business from the misuse of confidential information they should:

  • Ensure they have properly drafted employment contracts in place with robust confidential information and restraint of trade clauses;
  • Securely store and maintain your confidential information;
  • If you allow your employees to store information on their personal computers to do so by remote access which only you can control;
  • Have a clear procedure in place with your employees in relation to the storing and handling of confidential information; and
  • In the event of a breach of employment contract, acting on this immediately.

Further inquiries:
Jonathan Mamaril
Principal & Director, NB Lawyers – the Lawyers for Employers
07 3876 5111
[email protected]