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Is a former employee stealing your clients and staff?

When a customer comes into a business and steals an item from the shelves, the business suffers a loss. A prudent business owner will take steps to prevent such theft and even to pursue restitution from someone who commits the offense. However, in some Texas businesses, there is a type of theft that may have an even more devastating effect on the business.

An ex-employee who steals clients and other employees can quickly send your business into a tailspin. You may find your production grinding to a halt while you try to fill vacancies on your staff, and your profits may plummet as your customers jump ship. Like the prudent store owner, there are steps you can take to prevent this type of theft and options for seeking justice.

How can a non-solicitation agreement protect you?

One of the most important contracts you may have as a business owner is your employment contract. Not only does this contract outline the expectations between you and your employee while the employee is associated with your company, but it can also include restrictions on what your employee can do after leaving the job. A common restriction in an employment contract is a non-solicitation agreement, which can offer you the following protections:

  • It prevents any employee from persuading your other employees to leave your company and work with him or her at a new business.
  • It prevents an employee from leaving your business and taking a client list along with the intention of luring your customers away.
  • It prevents another business owner from taking key employees out of the company if you should purchase the business.
  • It may also prevent that business owner who sold you the company from trying to take clients with him or her.

Such solicitation of customers and employees may be direct, such as calling a former co-worker and offering him or her a job. However, your ex-employee may try subtler ways to get around the non-solicitation contract, such as sending job offers through third parties or directly advertising a new company to clients on your list. Indirect solicitation may be more difficult to prove.

Common problems with non-solicitation agreements

As with any restrictive agreement you make with an employee, if it is too restrictive, it may not hold up in court. Additionally, there is a difference between a former employee who offers a job to another worker and a current worker who seeks a job from your former employee. You cannot prevent employees from leaving on their own to work from someone else.

What you can do is to ensure your restrictive covenants are solid enough to stand up in court if you face a challenge. You can also enlist the assistance of a business attorney who is skilled in litigation involving the breach of restrictive covenants including non-solicitation agreements.

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Cain & Associates
508 N Ridgeway Dr.
Cleburne, TX 76033

Local: 817-506-3233
Local: 817-506-7061
Fax: 817-645-1739