David Israel offers solutions to businesses worried that staff will take their customers to a competitor.
How much does a business value its customers – are they long term investments that need protecting or are they seen as transient assets that are only as useful for so long as they want to buy from you?
The answer is that most companies spend a lot of time and money in establishing a loyal client base to whom they can sell their wares. So why then would they be happy to lose clients when an employee decides to leave and move to a competitor?
The answer is that in a lot of cases they will fight to keep their clients. It is commonplace to include within an employee's contract of employment clauses that seek to stop (at least for six or 12 months) a departing employee from approaching or dealing with such clients. Those clauses have given the courts plenty to do over the years and, quite often, the courts enforce such restrictions against a departing employee.
There are many and varied ways of winning clients – advertising, wining and dining, and use of social media are to name but a few. Gone are the days of big bulky address books. Employees now connect with contacts and customers on networking sites such as LinkedIn; indeed, they are encouraged to as part of the businesses (as well as the individual's own) communication strategy.
In using social media sites, businesses are to consider if they are inadvertently allowing departing employees to completely ignore the restrictions in their contracts about not "soliciting" customers, since arguably LinkedIn does this for the employee anyway.
When Joe Bloggs leaves, they change their employer's name on the site to the company they have just joined and LinkedIn does the rest by emailing all their LinkedIn contacts (namely your customers) telling them that Joe is now working at ABC Limited. It can even go a bit further as the site can also tell your customer how wonderful ABC Limited is. Bye, bye some customers that you spent all that time and trouble winning in the first place.
This brings us onto what you need to protect, how you can protect it and what you accept may be lost when people move on. Some of this is dictated by the social media sites themselves. Ideally the business would have control over the site logon and thus be able switch off a departing employee's access to the account when they leave. This is fine for some sites but for others it will be against the terms and conditions of that site. So, can it be policed in a different way?
The question is what belongs to the company and what belongs to the employee. This takes some thinking about before you decide what you want to do. There are obvious areas such as protecting your reputation and confidential information, which the company can police a lot easier with policies, monitoring and enforcement of contractual obligations.
There is then the question of clients and contacts, but how far does a company want to go to protect such clients from being poached by a competitor? This is quite often forgotten about. Businesses should certainly consider a clear communication that any restrictions under employees contracts of employment will, regardless of use of social media, be enforced.
While you may wish to seek to bar their new employers name being included on any social media site, that may be something that is unenforceable. Perhaps though make it clear that any further blurb about the new employer and the persons wonderful role would be deemed to be solicitation of clients which the business would take action over. On this note, make sure that your contracts of employment forbid dealing with such clients for a period of time – this may have more traction than a requirement simply not to solicit clients.
Social media is a communication tool – just decide when, to what extent and what the consequences of that communication will be and the different messages that can be sent out to what is your target audience.
Previously published in The Guardian - November 2014
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.