In a perfect world, every employee would act ethically throughout their employment, including after a potential departure. Small business owners want to feel at ease with every hire, and know that their current or former employees would never consider stealing trade secrets, staff or customers. However, the world is not perfect, so employers need to take steps to protect themselves against malicious workers.
Protect your workforce with a non-solicitation agreement
Non-solicitation agreements are very useful because you don’t want one departing employee to leave with your entire staff. You also don’t want someone leaving your company to spend their last week of employment redirecting a significant chunk of your customer base for their new company. To prevent a potentially devastating scenario, your employee contracts should specify that your workers are prohibited from poaching your other employees, customers or suppliers. As with non-compete clauses, the laws regarding non-solicitations vary across the country, so consult with a lawyer before creating your contracts.
Protect your intellectual property with an arbitration agreement
As this Find Law post points out, if you do find yourself in a situation where an ex-employee is using your intellectual property at a different company, you’ll want to resolve it through arbitration rather than litigation. Using an arbiter to resolve this kind of dispute will be cheaper and faster than taking the employee to court. All you need to do is include a clause in your employee contract that dictates any disputes between you and your employees have to be dealt with through an arbiter.
Protect your competitive edge with a non-compete clause
All of your employee contracts should include a non-compete clause. The clause should specify that after a worker leaves your employ, they cannot take any of your physical or abstract assets, including client lists, internal data or intellectual property, with them when they go. It is also recommended to include language that prohibits them from working for or starting another company that operates in your market and industry for a certain number of years. The clause should include information regarding why the non-compete clause is necessary and that agreeing to its terms is a precondition for employment. As laws regarding non-compete clauses vary by state and region, it’s a good idea to consult with an experienced labor attorney when crafting your employee contracts.
This article was written by Mario McKellop for Small Business Pulse