Company Defense: What to Know When You Have Issues With an Employee

Employee Issues
Employee Issues Photo credit fizkes/Getty Images
By Small Business Pulse

In a perfect world, every employee would act morally and ethically throughout their employment, including after a possible 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 any malicious workers.

Protect your workforce with a non-solicitation agreement
Non-solicitation agreements are very useful because they can prevent your entire staff from leaving your business when one disgruntled employee departs. You want to avoid one employee taking any of your other employees as they leave for any reason. You also don’t want someone leaving your company to spend their last week of employment redirecting a significant chunk of your customer base to their new company. To prevent a potentially devastating scenario, your employee contracts should specify that 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
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 an employee to court. What you need to do is include a clause in your employee contract that dictates any disputes between you and your employees need 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 an employee leaves your company, she or he cannot take any of your physical or abstract assets with them when they go, including client lists, internal data or intellectual property. It is also recommended to include language prohibiting former employees to work or start another company operating 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.