our everyday life

How to Keep an Ex-Employee From Stealing Customers

by Stan Mack

If you’re afraid your employees might someday quit and steal your customers, your only option is to have them sign a non-solicitation agreement before they leave. Essentially, your employees will affirm in a legal contract that they will not solicit your customers after leaving your employment. Laws vary concerning what non-solicitation agreements can cover, so it’s vital to hire an experienced attorney to draft the contract.

Limits

A non-solicitation agreement can’t always stop ex-employees from stealing your customers, according to the book “The Manager's Legal Handbook,” by Amy DelPo and Lisa Guerin. For example, courts tend to void non-solicitation agreements that place overly harsh restrictions on ex-employees. So, for instance, if the signed agreement makes it too difficult for an ex-employee to earn a living, chances are a judge will void the contract. Similarly, if customers leave you voluntarily for the ex-employee -- that is, they leave without undue pressure from your ex-employee, however that is defined under your local laws -- you probably won’t be successful in court.

Reasonable Restrictions

An experienced attorney can help you draft a non-solicitation agreement that is as strong as possible, considering your industry and local laws. Typically, non-solicitation agreements that call for reasonable and specific restrictions on an ex-employee are the least likely to be overturned in court. For example, your agreement should list specific clients that your ex-employee may not solicit for the first two years after leaving you.

Effect

A non-solicitation agreement only prohibits an ex-employee from actively soliciting your customers, not from servicing them if your customers decide on their own to switch providers. In other words, so long as your ex-employees don’t violate any agreements they signed, there isn’t much you can do to keep them away from your customers.

Other Options

If you have no legal means of keeping ex-employees away from your customers, your only alternative is to provide better value or lower prices. In other words, you must out-compete your ex-employee. This can be difficult if your ex-employee was the one who handled those customers for you -- the ex-employee likely has developed a relationship with your customers and knows how to meet their needs. But if you focus on making your company the best it can be, you can improve customer retention and perhaps win back former clients.

About the Author

Stan Mack is a business writer specializing in finance, business ethics and human resources. His work has appeared in the online editions of the "Houston Chronicle" and "USA Today," among other outlets. Mack studied philosophy and economics at the University of Memphis.

Photo Credits

  • Jupiterimages/Photos.com/Getty Images