Conway Schadler

Experienced Attorneys Serving Southeastern Pennsylvania

Call Today

What if employees leave and takes business with them?

On Behalf of | Feb 2, 2023 | Business |

The employees who make the most money for your business can also potentially do the most damage to it. Someone on your sales team might have access to a comprehensive list of all of your current clients. Those working in executive positions or in research and development may know quite a bit about future company products and projects.

Your workers could potentially take that information elsewhere to unfairly compete with your business. They could sell your trade secrets directly to competitors or leverage their knowledge when negotiating a position with another company. They could even start their own business that directly competes with your organization.

It is only natural for you to worry about someone that you hire misusing the relationships or information obtained through their employment with your company to do harm to your business. Thankfully, you can include clauses in your employment contracts to limit your risk of such situations.

Restrictive covenants protect you from unfair competition

Non-compete agreements have long helped employers minimize their risk of having someone that they hire start a competing company or go to work for a competitor while taking customers or clients when they leave. Many companies have started to transition away from non-compete agreements due to looming federal rule changes already proposed.

Non-solicitation agreements can also prevent workers from trying to close deals with your company’s clients or customers. A non-solicitation agreement can also conduct them from trying to hire your employees. Of course, the inclusion of restrictive covenants in employment agreements only create consequences for misconduct.

They don’t automatically prevent someone from doing something that could harm your company. You will have to recognize the warning signs of unfair competition and take legal action in a timely manner if you hope to prevent your employee from harming your company.

You can potentially enforce your existing contract in court

A judge could impose damages or order the former employer to stop competing with your company. There is no way of knowing what employees might eventually engage in misconduct, but your company can protect itself with proper contracts and careful monitoring of local competitors.

The way that you structure your contracts and the exact terms you include are more important than ever, especially as employment laws continue to change. Protecting your organization from employee misconduct requires careful planning and the right support.