You are a contractor in the Entertainment and Event Production Industry, and things were going well up till now. You hired your first employee, a family friend because you wanted to make giant leaps in the market.
The new blood has the knowledge, experience, and quality to get things done. He is building strong relationships with your customers, vendors, and partners and you are investing money into him, so he is always productive. You trust him and are focused on making things better for your employee, clients and yourself. And suddenly, he quits.
The next thing you come to know is that your clients are being poached by him for a reduced price, and perhaps a better service because he knows your weaknesses. The bad news is that you find that some of your clients are willing to jump ship. So, in that case, what do you do when your ex-employee or sub-contractor start poaching your clients?
You can complain to your mom or break his hands for cheating and try to take unfair advantage of your well-established business. After all, it takes years of investment and marketing strategies to build a solid client base, but the other guy stole it and didn’t even have to invest a dime in it.
Here’s how you can protect your business from client poaching.
The first thing you should do is to look at the papers you asked your employee to sign at the time of joining. In fact, job and confidentiality agreements for the most creative workers usually have a clause related to the non-solicitation.
For example: “… agree that during the term of your employment with the Company and for 24 months after the termination thereof, regardless of the reason for the employment termination, you will not, directly or indirectly, solicit or attempt to solicit, or accept any business from any of the Company’s Clients, Prospects, and Vendors with whom you had Material Contact during the time of your employment with the Company. ”
If you have something like an above duly signed agreement by your ex-employee or sub-contractor, it can be fully enforced by the courts. It’s the right time to get a lawyer involved and usually “a cease and desist letter” may be enough.
Your ex-employee can opt to ignore this letter as it has no legal standing, but this gives you an opportunity to start a legal action. Courts have been diligent, and there are chances you may recoup part of your losses and might even claim the income lost.
Hiring lawyers is the financial decision that will cost you both time and money. It may not get you all your clients back, but a crippling legal judgment against the bad guy can put tape on the leakage and will stop the dripping.
By taking these necessary actions, you’ll be able to stop your ex-employees from taking advantage of your business. In fact, any business owner can sustain a long-term relationship with its clients by being honest, transparent, and loyal to them. Once you do so, they’ll stay hooked to your company’s products and services.