Lead them not into temptation
What would you do if two of your sales people resigned, formed their own company and started doing business with your top customer? How about if one of your best engineers was offered a job by one of your clients where they get a higher salary and the client saves hundreds of pounds per day on your rate?
Well, the answer is unless you have planned ahead, your business will be affected and you could face a substantial loss. The effect on a small dealership can be even more devastating and sometimes results in bankruptcy.
Taking legal action after the event can be very expensive and the chances are that you will not win unless your terms, conditions and contract of employment are tightly written.
Even if you win the case your legal costs will be higher than those awarded by the court. This does not take into account the disruption to business, plus the loss of business from the customer you are suing, and who will not be doing business with you in the future.
It is a no-win situation and the best you can do is avoid the whole process.
One way to ensure your customers are not tempted to lure your employees away is to send terms and conditions that include non-solicitation clauses every time you receive an order.
Terms and conditions are necessary to protect your business and should cover all areas of trading. A more practical approach is to get the customer to sign your terms and conditions and confirm their acceptance from the outset.
In court, the customer may deny receiving your conditions so the onus is on you to prove they have received them. My advice is do not prosecute, but make sure they understand that you are prepared to take legal action if an agreement is not reached.
If you decide to take action, then ensure you have enough money to last.
A court case can take over a year and unless you have a good lawyer and a healthy bank account you might lose.
Protecting your business from ex-employees is a different matter, and a contract of employment to cover this area is essential to stop them contacting your key accounts once they leave. I was told by a solicitor that a court would not be sympathetic if the period preventing employees from contacting customers is longer than a year.
If they decide to take the risk, then a court injunction will stop them provided you can prove they are doing business with your customer. This is a lengthy and costly exercise and even if you are awarded costs and damages the ex-employee might not be able to pay.
In both cases you will be better off investing the money, adding value in areas that will secure customer loyalty and stop such temptations to staff and clients.
Ayman Al-Och is managing director of Syntax Integration.