After an Employee Leaves — What to Do
Posted May 13th, 2013
As companies look for ways to stay viable and profitable, they are looking more closely at their workforce, particularly when an employee leaves the company. Concerned about what the person may take with him or her, companies are using post-employment agreements to put certain restrictions on former workers.
Companies now more than ever are doing everything they can to protect their most valuable assets, which include information, skilled workers, and their customers. And they are more willing now to enforce the provisions of any post-employment agreements, usually through an injunction against the former employee demanding that the individual stop whatever he or she is doing that violates the agreement.
Companies make these agreements because employees, when they leave a firm, take with them knowledge about the company’s business strategy, customer contacts and pricing structures that could help a competitor.
These restrictions are built into employment contracts to stop employees from working for a competitor, taking away customers or suppliers, or even contacting former clients or customers or suppliers.
There are limitations to the restrictions, though. The law only allows a company to put in place those restrictions that are necessary to protect its business interests. The length of time the restrictions are in effect, the geographic area they apply to, and their overall scope all need to be looked at. These need to be balanced against the former employee’s seniority and role in the business. The particular agreement needs to be individualized for the business and the employee in question. A standardized agreement will not work.
If you are looking at a job candidate with such an agreement, you need to find out the terms of the agreement as soon as possible in the hiring process to determine what provisions are enforceable and your company’s ability to follow the provisions.
As to whether they can be enforced, you need to see how the provisions have been drafted – are they too broad, do they conform to the criterion of protecting only the company’s legitimate business interests?
If the provisions in the agreement are enforceable, you need to consider how this will impact the performance of the person if he or she should be hired.
If your company is in the San Francisco area and is looking for qualified IT professionals, Bayside Solutions can provide you with the personnel you need. Give us a call today.
