60 second blog: Client theft – Don’t lose clients to past employees
Okay – Staff do leave. That’s fine. Few stay forever. However, it is not okay they take your clients with them as a parting gift.
The clients belong to the employer and their job was, directly or indirectly to…
The parting employees were paid to do this job during their employment. However, these clients belong to you, the employer, not them, the employee.
We all have non-competitive clauses in our staff contracts. They are effective but only to some extent, usually, it’s expensive and time-consuming to enforce them.
There is an alternative way of locking the door. Insert a clause into your client agreement…
This is a commercial clause – between two companies – not an employer/employee agreement where the courts typically favour the employee. The employee cannot interfere with this agreement.
Will the client object to this clause, unlikely, in the 20+ years I’ve used it, I have never had one. Will they respect it? By and large, yes when you point it out to them.
However, you must inform your staff that:
• this clause exists in the client agreement
• the client is bound by this agreement
• you have all intentions to enforce this clause
Inform the employees that if a staff member breaks their agreement and takes clients away from the company, this company will suffer. Therefore their current colleagues are in danger. As managers, we have a duty of care to look after the company and the remaining employees. We have an obligation to act on this and we intend to do so…
So, it is okay for them to leave at one point (we don’t expect most of our employees to retire from the company); but if/when they leave, it shouldn’t be with the company’s clients in their back pocket!
Prevention is better than cure. Of course, hiring the right people in the first place could avoid this issue.
See also: How to motivate your staff
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