Stop Employees Stealing Customers

honeymonster

Hey

I would like to set up a business but there would be a great opportunity for my employees to service the customers I introduce them to behind my back.

Is there any legal form you can get whereby and employee even if a freelancer is not allowed to work for any of the customers they have made contact with through me?

Thanks for the help,

keefg

A visit to your solicitor is probably your best bet, but to be honest I can't see what you can really do about your staff doing nixers for your clients - especially if they are undercutting you and the client is happy to pay less.

I mean, how will you find out?

lecheile

honeymonster wrote: »

Hey

I would like to set up a business but there would be a great opportunity for my employees to service the customers I introduce them to behind my back.

Is there any legal form you can get whereby and employee even if a freelancer is not allowed to work for any of the customers they have made contact with through me?

Thanks for the help,

Three things I'd recommend honeymonster

(1) Look after your employees and incentivise them for the work that they are responsible for generating - you can include restrictive clauses in contracts of employment but enforcing will always be the end of relationship with employee and possibly with client (who will have built up a relationship with the employee and will be told one side of the story!)
(2) Package your service offering in such a way that customers are less inclined to buy the service piecemeal thus reducing the opportunity for your employees to respond to indicidual service requests
(3) Regularly demonstrate to your customers the value-add that is being provided by the company over and above the individual doing the work - whether it is guarantees, access to expertise or equipment etc.

delllat

I am glad someone mentioned this

its an interesting topic that comes up every once in a while

a great recent example is i used to import plasma screens from an asian company

they had a young girl manning the chat line (she could speak englsih-the owner couldnt or didnt like to)

so we dealt with their company for 6 months or so

then one day she came online with new chat id and introduced herself

told us we could now get orders from her and bla bla bla.....

id imagine all the clients from the old business got the same treatment!

the funny part was when we ordered,(they used to always put a thank you card in with every crate and a business card)

so i open the order and the card was identical to the ones we used to get EXCEPT she had her new contact details:D

so basicallly not only did she steal the business,suppliers,customer base and everything else she also stolen his nicely designed thank you and business cards

poor fcuker! :rolleyes:

lanod2407

I guess I'd have 2 points:

1. If your business is so easily replicated that any one of your employees could take it and sell the service to your customers then how secure a business is it? Sounds like the barriers to entry for the business / industry are almost non-existent in terms of cost and expertise?

2. Don't allow any of your employees to hold a position where you are totally dependent on their expertise or they have too high a level of control over your business and customers - see Delllat's example as a case in point. That example was easy to identify - many are not so obvious. Actually they're so hard to indentify that I can't think of one right now

Barname

trying to guess the business.....


pimping?

jon1981

hairdressing i would think...

delllat

lanod2407 wrote: »

I guess I'd have 2 points:

1. If your business is so easily replicated that any one of your employees could take it and sell the service to your customers then how secure a business is it? Sounds like the barriers to entry for the business / industry are almost non-existent in terms of cost and expertise?

2. Don't allow any of your employees to hold a position where you are totally dependent on their expertise or they have too high a level of control over your business and customers - see Delllat's example as a case in point. That example was easy to identify - many are not so obvious. Actually they're so hard to indentify that I can't think of one right now

the problm with number 1 is most business plans are easy to replicate and with a bit of education or training almost anyone could repllicate any business

any teachable skill can be copied and there is very little you can do about it ,i would just concentrate on being as good as you can possibly be and then even if someone copies your business exactly youll still beat them with more impresssive service/extra features etc

(of course its good to keep staff doing lower level tasks and do the negeotiating and dealing with wholesalers yourself so only you will know what the profit margins are -someone will be less likely to copy you if they dont know you are making decent money)

honeymonster

Barname wrote: »

trying to guess the business.....


pimping?

hahah how did you know??!!!

The barrier to entry is finding clients, I know a few but once I introduce employees to them there nothing stopping them from working behind my back. I was wondering if there was a legal form were if I could prove an employee was working for a client I introduced them to I could sue.

delllat

honeymonster wrote: »

hahah how did you know??!!!

The barrier to entry is finding clients, I know a few but once I introduce employees to them there nothing stopping them from working behind my back. I was wondering if there was a legal form were if I could prove an employee was working for a client I introduced them to I could sue.

if there isnt one im sure a solicitor could make one for ya

it would be a better idea to have it as a clause in the contract they sign when their employment starts than for it to be a separate form

that way they would have already agreed to it but you wouldnt have to put the idea into their head by asking them about it

Darragh29

honeymonster wrote: »

Hey

I would like to set up a business but there would be a great opportunity for my employees to service the customers I introduce them to behind my back.

Is there any legal form you can get whereby and employee even if a freelancer is not allowed to work for any of the customers they have made contact with through me?

Thanks for the help,

Best thing you can do is warn everyone working for you that they are legally obliged to act honestly with regard to their employment and that you regularly consult with customers with a view to identifying any attempts by staff to do business with them behind your back. Also say that some of your customers are good friends who will report back to you any attempts to go behind your back. When you are open about this, you'll find people will think twice about going behind your back as they know you are on the look out for it.

Lastly say that anyone caught will be fired immediately, exceptions none.

smelltheglove

It's a difficult one, I dont come in here often but thought I would mention I know someonewho built a business through this. He decided he was going to leave his job and over the course of a couple of months he priced company jobs but also sent the clients his undercut pricing.

Honestly though he did not last in business long himself and has gone into employment again, but guess what, nothing like what he had before. What goes around often comes around.

onedmc

honeymonster wrote: »

hahah how did you know??!!!

The barrier to entry is finding clients, I know a few but once I introduce employees to them there nothing stopping them from working behind my back. I was wondering if there was a legal form were if I could prove an employee was working for a client I introduced them to I could sue.

If this is the case then I think that you should see this as a refferal business and make the fees just like recruitment agents do with temps. In this case the contract makes sure that that the customer pay you +20% for the temps work no matter what they do.

Lplated

OP - the simple answer is that you can (and should) put restriction clauses into your employees/freelancers contracts - these would prevent them setting up in competition with you, using information obtainined while working for you and working with a competitior of yours within a certain defined geographical area for a specified time. Your solicitor will help with the wording.

A more effective solution is to find some way (i have no idea what your business is) of ensuring that poaching your customers is difficult - for example by using different employees to deal with the customer each time or ensuring that some part of the service offered has to be carrried out by you or that you have some legal exclusive right over a particular product used in the process or whatever.

Unfortunately, poaching is relatively common, your remedy is the law which can be expensive and unsatisfactory. Best to design a system that may counter it or make it difficult.

byrne0f56789

It comes down to the people you employ. You have to trust them. It's as simple as that. If you are not paying them enough then they may go out on their own and take your customers. If your customers go with them then they are the ones offering the value and not you.

If you compensate them fairly you should be ok. The headaches of getting paid and marketing are too much for most employees to deal with. It must be a "win win" for both of you.

Will you take them to court if you have a non-compete agreement?

toxicjeni

Wow! I'm shocked that only one of ye had a practical response.

Before any of ye start a business, you should consider a business course or ye'll struggle!

A restriction clause is a fairly simple solution as Lplated suggested. They are recognised in Ireland and you can use something like not running or working in a similar business in a 10 mile radius/ same county/ same province for a number of years.

I had one in my last job ... an accountant in eircom and now can't work in the telecommunications industry worldwide for another 4 years... Meh

Clauses about taking customers are more difficult to enforce as should she start a new business and your customer switches it is very difficult to prove without a shadow of doubt that that customer did not move out of their own free will and choice which also has potential if they happen to like the employee.

That's just my tuppence. :-)

Lplated

toxicjeni wrote: »

A restriction clause is a fairly simple solution as Lplated suggested. They are recognised in Ireland and you can use something like not running or working in a similar business in a 10 mile radius/ same county/ same province for a number of years.

I had one in my last job ... an accountant in eircom and now can't work in the telecommunications industry worldwide for another 4 years... Meh

Clauses about taking customers are more difficult to enforce as should she start a new business and your customer switches it is very difficult to prove without a shadow of doubt that that customer did not move out of their own free will and choice which also has potential if they happen to like the employee.

That's just my tuppence. :-)

The test for restriction clauses is reasonableness - they can't be set too wide with regards to the rangeof jobs that can't be taken up afterward, the length of time concerned and the geographical area.

For e.g. in a small town, a hairdresser might be restricted for one year from opening/working for a competitior within the same town boundries - the reasonableness test is quite low there because there are a lot of hairdressers, the kind of thing they learn or customer they deal with in one shop isn't at a vast scale etc...

On the other hand, a scientist working on research of a new blockbuster drug for a pharma co might be restricted worldwide for 5 years - the difference of scale being due to the type of job involved.

This is NOT legal advice, but in your case, if you are interested in working for another teleco, i would go see a solicitor - 4 years is long enough in terms of a restriction clause for an inhouse accountant, and worldwide seems excessive to me (unless you were dealing with very particular information that could be damaging to the company). My gut is you might have grounds to challenge or at least re-negotiate.