If you think some of your partners may be planning a team move, it is important to get specialist advice. A well drafted Partnership or LLP Agreement can give you protection and seeking early advice is crucial.
What does a Partnership and LLP team move solicitor do?
If a team move is discovered, there are steps that a partnership or limited liability partnership (LLP) can take to minimise the damage. Our team of experienced solicitors can help put appropriate provisions into partnership or LLP agreements, such as placing the partner/member on garden leave or enforcing restrictive covenants to stop them competing.
Additionally, we can advise on whether there is a case to issue proceedings for damages and an account of profits; seek an injunction against the partners and/or a “springboard injunction” against the new business or competitor.
What is a team move?
A team move is where two or more partners or members leave their partnership or LLP, either to set up on their own (usually in competition with their former firm) or to join a competitor.
If a team move is discovered, the partnership or LLP has to consider whether its conduct is unlawful. This may depend on whether the firm is a general partnership or an LLP. Partners in a general partnership are in a fiduciary relationship with each other and therefore owe one another a duty of good faith. Conversely, subject to what’s in the LLP Agreement, members don’t owe each other the same duty.
Team moves in traditional partnerships
In the case of a partnership, forming a team of partners with the intention of leaving will breach the duty of good faith, as the partners would not be acting in the best interests of the partnership. That will equally be the case if a partner tries to encourage employees of the partnership to join them.
In fact, as partners also have a duty to disclose both their own wrongdoing and the wrongdoing of others, they will breach that duty too if they don’t inform the partnership of their plans.
Team moves in LLPs
Conversely, an LLP member planning a team move may not breach any duty if there aren’t any express obligations in the LLP agreement. However, if they approach any employees, they might breach their fiduciary duties as an agent of the LLP. It is also important that a member does not misuse any LLP property, particularly confidential information.
If a team move is discovered, there are steps that a partnership or LLP can take to minimise the damage. If there are appropriate provisions in the partnership or LLP agreement, they could place the partner/member on garden leave or enforce restrictive covenants to stop them competing. They may be able to issue proceedings for damages and an account of profits, seek an injunction against the partners and/or a “springboard injunction” against the new business or competitor.
Why choose B P Collins as your team move solicitors?
With over 50 years of experience in employment law, we’re consistently ranked by Chambers UK and The Legal 500 for the strength of our employment practice. The employment solicitors at B P Collins are also members of the Employment Lawyers Association.
Price and service transparency
We pride ourselves on achieving the best possible and most cost effective outcomes for our clients, be that through pursuing a strike out of some or all of a claim or defence or negotiating an appropriate settlement.
View our price and service transparency here.
Contact our employee advice solicitors today
If you are unsure whether your firm has adequate protections in the case of a team move or if you need help dealing with a threatened team move, get in touch with our experienced lawyers on 01753 889995 or email enquiries@bpcollins.co.uk.
