How to Prevent Employees from Exploiting Your Business

Posted on: 31 July 2015

Many business owners have been dismayed to discover that their former employees are engaged in activities that disrupt their businesses and it is too late for them to stop it. How can this be prevented? Read on and find out some clauses you can include in employment contracts so that you protect your business once an employee leaves.

Restrictions on Customer Solicitation

Include a clause about this issue in the employment contract you give new workers. The clause should bind the employee to avoid soliciting customers of your business for a given period once he or she is no longer working for you. Such a clause will protect your business from losing its clients to a rival business that your former employee works for immediately after leaving your business.

Restrictions on Supplier Solicitation

You can also request your provider of legal services to draft an employee contract that has restrictions barring that employee from ever soliciting the suppliers of your business that he or she got in contact with while he or she was still working for you.

This clause is important because the key to the success of your business may have been its ability to identify exceptional suppliers who provide unrivalled goods and services so when an ex-employee solicits such suppliers then your business may be in danger of losing its competitive edge.

Non-Compete Restrictions

You should also have a clause stopping an ex-employee from starting any business that would compete with your business. This restriction can be for a clearly defined duration, such as five years. That time lapse should be decided based on your judgment of how long it would take the business information and contacts in the possession of the ex-employee to cease to pose a threat to your business.

You should remember that each jurisdiction has its own business laws so any employment contract you draft should never seek to override current laws or else it will be challenged and voided by a court of law. That is why you should avoid drafting any contractual documents by yourself.

You should instead hire legal services like CLP Legal so that his or her knowledge and experience help to design comprehensive employment contracts that will protect your business while at the same time be in conformity with existing state or national laws. With these clauses added to your employee contracts, you can ensure that those who leave the company won't have any advantage over you.