A design studio always runs the risk of losing key employees to their competitor – that’s the free market.
But how about the employee that leaves to start an internal design division for a current client – thereby removing the need for your services – and a big chunk of our business. I’m happy for her and wish her luck, but she only got the job because of the studio’s connection - she wouldn’t have found it on her own (the place is big, but obsure). And now she also has quite a bit of info regarding our business structure and client info.
Do you have an provisions in your contracts that set boundaries for competition after the employee has left your company?
When I worked for a design consultancy it was in my contract that I couldn’t offer services directly or indireclty to any current clients for a period of 1 year after I left the company.
Yeah, if she didn’t sign a non-compete clause with you, you really don’t have a leg to stand on. I know for all the consulting firms I’ve worked for, there was always a standard non-compete clause that says you can’t work for, or approach competitive businesses within an X mile radius, etc. etc.
Unfortunately, no non-compete - just a verbal agreement that she would not take current clients or approach them about hiring internally. I don’t mind the competition in general - I say bring it on!. But it does seem unfair/uncool for her to build her own future (and rob ours) based on the studios sales and marketing efforts. Apparently, she approached a few of our clients in this respect. Probably nothing I can do about her now.
Any samples of non-competes caluses to add to the contract that I can use in the future?
Wish her the best and take her to lunch. You want her as an ally not a foe. You want her to refer work to you.
The client now sort of owes you. Take the high road and think of it as getting someone inside the client to promote your company further. They can use in-house and external.
Forget about the business structure and client info and concentrate on your existing business relationships.
You should run your business so that whenever she speaks of your firm, she will always say good things about you and your firm’s work.
design studio always runs the risk of losing key employees to their competitor – that’s the free market.
But how about the employee that leaves to start an internal design division for a current client – thereby removing the need for your services – and a big chunk of our business. I’m happy for her and wish her luck, but she only got the job because of the studio’s connection - she wouldn’t have found it on her own (the place is big, but obsure). And now she also has quite a bit of info regarding our business structure and client info.
Shady? Sounds to me like she was offered an opportunity to further her career and she took it. Any person with ambition would do the same, especially if not bound by a contract stipulation. If the employer didn’t ask for a non-competition clause then there was nothing wrong or shady with what she did. An employee’s first loyalty is to themselves, employer second.
and learn from past experience and get the rest of your staff to hire non-competition clauses (although now, you may have to offer some incentive to get them to do so, since they already have the job)
If you use non-competes then you have to make sure they stand up in court.
If you make a non-compete I would strongly advise you get input from your staff. Making the non-compete too restrictive will raise your employees eyebrows.
Do you really want to start legal action against past employees? You get a bad reputation and any money you get goes to your lawyer. Lose, lose, win.
You lose, your past employee loses, the lawyer wins.
Make your studio a better place so you have a high retention rate. You should lose about 10% of your staff if your workplace environment is great.
20% would be average. 30% means the problem is with managment. You want people clamouring to get in because of challenging work, friendly environment and excellent compensation. Mark your studio out of 30. 25 and up would be terrific.
