THE improving economy means companies are finding it increasingly difficulty to retain key employees and preventing rivals from using their contacts, lawyers have warned.

Employment experts at Ward Hadaway say the strengthening economic outlook, combined with rising competition, is forcing firms to make holding on to workers a key priority.

The firm, which has offices in Newcastle, says the situation means confidentiality agreements and restrictive covenants are now the source of a growing number of disputes.

Joe Thornhill, partner and joint head of employment, said the picture was changing.

He said: “While the UK was still in recession, most employees' focus remained firmly on keeping their jobs and helping their employer to weather the economic storm.

“However, now the situation is improving, the economy is picking up and companies are expanding their workforces, the battle for talented, high performing workers is hotting up.

“Many of those who stood by their employer during the recession are now being tempted by offers from rival businesses or are considering starting up their own companies.

“While this is in many respects the sign of a healthy economy, there is no getting away from the fact it can cause serious problems for companies if key staff leave, particularly if they take valuable inside knowledge, clients or work with them.

“Cases involving employees accused of breaching confidentiality agreements and restrictive covenants in this kind of situation are on the rise, particularly in sectors where customer and client relationships are important, such as professional services, or in roles such as key account managers.”

Mr Thornhill said the increase in such cases has led Ward Hadaway to expand its work on employment protection.

He added: “Litigation involving breach of covenants or confidentiality agreements can be expensive with the outcomes uncertain, so adding this to the employment protection package is a pretty significant add-on.

“It gives companies the ability to be more robust when it comes to these situations in enforcing those clauses.”