How to handle employees leaving to set up in competition

Wednesday February 27, 2019

One employee leaving the business to set up in competition may be considered a misfortune. Several leaving at the same time, to paraphrase Oscar Wilde, looks like carelessness. Our political leaders are facing just this dilemma as the Independent Group of MPs is formed. But what would happen to you if three of your team suddenly resigned to set up against you?

They have all your prices, details of customer relationships and the rest of your staff are watching to see what you are going to do.

The good news for employers is that there are ways to reduce the risks involved. Preparation is key for a smooth transition. Read on for some crucial points for consideration.

Their contracts

Check notice periods. We imagine you won’t be too keen to have them wandering around the office for that period. This is why it is important to have a Garden Leave clause in their contract. This means that they continue to be an employee but stay at home and are not allowed to work elsewhere.

Restrict access

Your employees no doubt have access to passwords, data and sensitive information in order to carry out their day-to-day work. So you should block access immediately.

Restricted covenants

A well-drafted contract outlines terms of employment for an employee and protects your business interests during, and for a reasonable time following, their employment. However, they are extremely difficult to defend unless the restrictions are reasonable and appropriate. So, protecting your customers, prospect list and staff that they have worked with is paramount.

Communication and PR

You will want to make sure that their exit doesn’t disrupt the rest of your workforce or your customers. Agree a statement to go out to customers. At this point, it is a good idea to involve a PR agency in case the press pick up on it. Hold a staff meeting and put as positive a spin as you can on the events. Remaining staff will naturally feel concerned so reassure them that it is business as usual.

Recruitment

You will need replacements as soon as possible, so contact The HR Dept to help. Our fees won’t break the bank.

Preventing People Problems

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