Employee problems are inevitable; even the world’s most employee-friendly companies are not immune to it.

Among all employee problems, perhaps one of the most difficult to handle is one where the employee is about to leave to set up his own business (company competitor) or is about to resign to take a job at a rival company. Such situations often become the trending topic for office gossip, causing even more unrest and derivative employee problems. If other employees get the same idea, who’s to stop them from leaving, too?

Now, I’m sure you’re not that interested in the office-gossip part. The first question here is
Can you do something about it? In most cases, yes you can do something about it even if the employee is not under a non-compete contract.

No One, Not Even a Superstar Employee Can Serve Two Masters at the Same Time

Always remember that even without non-compete contract between the company and the employee; an employee is legally bound to be loyal to his current employer. Even if no agreement was signed, the resigning employee could be held liable for whatever damages he causes as he exits the company, depending on the state in which you reside and damages are quantifiable.

The duty of loyalty is embodied in each employee, and is expected of him until he ceases employment with his employer. Until the employee is receiving benefits or monetary payment, his duty is to consider the best interests of the company paying him.

Employee Tactics: Preparing to Compete without Being Disloyal

Although employees may still owe this duty of loyalty to employers, it doesn’t also necessarily mean that they cannot prepare to compete against them. Yes, they can do the work they’re being paid to do, thereby remaining loyal but they can do this AND start looking for other jobs at the same time. Employees preparing to leave may use this time to learn trade secrets, industry best practices, or maybe prepare a business plan for his startup or next employer.

There are many reasons why an employee would want to stay in the company whilst preparing to compete against it. Aside from learning everything they could use in the future, financial constraints might prevent them as well.

Keep in mind that it’s inevitable for employees to learn and even improve upon their experience from your business. The problem starts when employees resigning to work for or become the competition when they poach vendors, current clientele, other employees and even suppliers from your company. Trade secrets and unpatented products could pose a problem if the resigning employee has some knowledge of these. As I mentioned earlier, this is not a simple problem of attrition. This type of employee problems bleeds into all facets of the business. It could even eliminate you from the playing field!

Protecting the Company against a Possible Competition from the Inside

There are many ways to help your company’s resources from being pilfered by resigning employees.

Here are some ideas.

1. If you haven’t had your key or top employees sign non-compete contracts, consider asking them to do so. Ask your lawyer to draft the non-compete contract to ensure that all your rights are protected.
2. Have a larger employee base sign non-solicitation contracts with a lengthy duration, so they can’t poach your vendors and clients immediately after resigning.
3. Have all employees sign contracts regarding confidential information, as well as trade secrets. Consider putting such rules in the employee guidelines, as well.
4. In the guidelines, also remember to put matters regarding the duty of employees to stay loyal, productive while under the company’s employ. Outline their responsibilities and make it clear what it means to “protect the company’s best interests”, otherwise this will just be a vague guideline and a potential loophole in your rulebook.
5. For leaving employees who are considered risks, do not accept immediate notice of resignation with no clear reasons.

Through these simply ways, employee problems with regard talent and market competition could be minimized. In addition, it can also address future problems when it comes to risky employees who may eventually become competition.