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What if an employee leaves and takes business with them?

On Behalf of | Nov 8, 2021 | Business |

Your employees should help you build your business, not undermine or destroy it. When you add to your staff, you want to improve your company, not damage it. Unfortunately, workers can potentially cause a lot of damage to your company.

A new hire could provide you with subpar work that affects how customers feel about the products or services you offer. An established employee could abuse their co-workers and cause a sexual harassment law. Someone you trust with business secrets, like a manager, could also misuse the information they have access to at your company when they eventually leave.

If your former employee has started poaching your customers, duplicating your production process or otherwise trying to directly take away your business, what options do you have?

Your contract with the worker can influence your options

One of the first steps to take when you suspect unethical competition by a former employee is to review your employment contract with them. If that contract includes certain restrictive covenants, you may be in an actionable position.

A non-disclosure or non-compete agreement can strengthen your right to take civil action against a former employee who misuses the private information or trade secrets of your business. A non-solicitation agreement could allow you to act if they try to work with your customers or clients, as well as if they try to hire your staff.

If you do not have a restrictive covenant with that worker, you do still have the option of taking them to court for their unethical and potentially illegal attempt to compete with you.

Your workers cannot just steal your trade secrets

Every business has unique information that helps make it profitable. This information ranges from vendor lists and customer databases to proprietary manufacturing processes and secret recipes. Any information not readily available to the public that gives your business a competitive advantage is a trade secret.

Workers given access to trade secrets as part of their employment cannot steal that information to unfairly compete against you later. Although it isn’t inherently illegal to compete against you, misappropriating a business’s trade secrets for financial gain is unethical and potentially legally actionable.

Knowing your rights as a business can help you fight back if a former employee tries to steal ideas or business from your company.