We have a Electrical Design Engineer who has worked

Many thanks for your patience. There would certainly be intellectual property issues her because the designs would likely come under copyright protection. The laws on IP in the workplace can be complex but there are some useful ground rules which apply depending on how the person who created the IP was employed.
If someone works as an employee then any IP they create in the course of their employment would automatically belong to their employer. However, if they were working on a self employment basis, as a freelancer or consultant for example, then they will own the IP rights, even if they had done the work specifically for an employer or done it in the course of their employment for that company. That is unless there was a specific agreement which assigned the IP rights from the consultant to the employer, however you have advised me that in this case there was no contract in place so no such agreement is likely to have been in place.
So as it stands, assuming this person is self employed and doing work for you on a consultancy or freelance basis, he would own the IP rights to the work he has undertaken for you. So if he was to leave he could take the work with him, even if that affects your business in the process. It may therefore be best to try and negotiate with him somehow so that an amicable agreement is reached. Often such issues could be resolved by having a friendly chat rather than going in with a hostile intention from the start. He may be agreeable to leaving the designs if he gets something in return so see what his position is and try to negotiate something which suits both of you.
I trust this has answered your query. I would be grateful if you could please take a second to leave a positive rating (selecting 3, 4 or 5 starts at the top of the page). If for any reason you are unhappy with my response or if you need me to clarify anything before you go - please get back to me on here and I will assist further as best as I can. Thank you