Written Policies To Prevent Customers From Hiring Your Employees

Looking to get a feel for the idea of written policies that would prevent your customers from hiring your employees (non solicit). Do you have them now? would you enforce them if you did? Thanks


Are you looking for something for the customer to sign?

Who doing the soliciting to whom?

Maybe a non-compete with the employee is what you want, no?

Yes, something for the customer to design.

We offer, much like many here, a very boutique type of service. We school, train and staff for some customers.

In this case the customer may be tempted to cherry pick, taking some employees (and their responsibilities in-house), leaving us with the more unattractive and less profitable portions of the entire contract.

I don't disagree with U2 remarks about the employee.

In the case where you have a specific contract for an specific SOW, you could add in a one-time headhunting fee of 50% (of their new annual salary) in the case when someone jumps.

Assumedly, this would make it unprofitable over the term of the contract for the customer to do so.

Though, IMHO, something is broken if your customers are able to lure your employees away.

If they are offering more money to them, then you should be considering raise your rates and paying them more.

It is not a question of salary or money of any kind. When you work so closely for a particular group, close relationships are forged. When employed by us, employees often have to work for more than one customer; some they like, some they don't. Our employees, like all here I am sure, have collateral assignments from time to time. If the customer hires them they are exclusive of course. The employee would consider that more attractive.

For example, a system programmer for us works for several clients on any given day. From the employee perspective, they would rather work for one client only; the one they have formed bonds with.

I understand completely about the client bonding issue.

One way to combat this (when possible) is to not send people on extended engagements alone. This inevitably leads the employee to feel as though they are working for the customer. New employees are particular susceptible to this illusion.

If you can manage it, have at least two people for any job, even if you have to split them between two jobs. Then your employees bond to each other and the rest of the company.

Finally, you say it's not a question of money or salary, but what do you mean by that? Are they being offered the same amount by the customer? If so, yes many will find the less stressful gig enticing. IMHO, you should be paying billable people 25% or more than they would typically make as salaried staff.

I think a more important question is:

Once your employee has decided that he wants to make a change, is this really someone you still want around - contract clause or not?

In my experience happy, engaged, and fulfilled people rarely go looking around for greener grass, and see offers from other employers as compliments more than comething to be seriously entertained (assuming no change in role / responsibility and no insane salary increase).

otherwise I +1 Und 1's suggestion of a conpompete.

...and see offers from other employers as compliments more than something to be seriously entertained...

Also, in the case of customer-made offers to employees, typically they are not able to match on salary for a staff position, since the former employee becomes part of the expense side of the business instead of the revenue.

Sometimes, the allure is the job stability, that can be difficult to match tho.

Something very similar to this.

7. NONSOLICITATION

During the term of this Agreement and for a period of one (1) year after the expiration or termination of this Agreement for any reason, each party hereto agrees that it shall not: (a) directly or indirectly disclose to any other person, partnership, corporation or association, the names or addresses of any of the customers or clients of the other party; (b) induce or attempt to induce any employee, agent or former employee or agent of the other party to leave the employ of the other party, or hire any such employee, agent or former employee or agent in any business or capacity; or (c) make any statement disparaging the other party, any member, principal, officer, director, shareholder, employee or agent thereof, to any person, firm, corporation or other business organization whatsoever.

I think there is value in adding this to a contract, certainly it could deter someone from attempting to poach in the first place.

A couple of comments to note are that thd phrase

...induce or attempt to induce any employee, agent or former employee or agent of the other party to leave the employ

does not prevent the customer from hiring, only from soliciting, the burden would be on you to prove solicitation. In the case where the employee actually accepts the new position, it's unlikely that they will give evidence against their new boss, so it might be difficult.

And in the case when the employee doesn't take the position, are you ready to enforce some penalty against your client just for trying unsuccessfully?

Also, what is the remedy you had in mind in case of breach? As it is unlikely that you can legally force the client to not hire the employee, since courts generally take a dim view of restricting an employee's oppurtunities. Normally it would allow you to break the contract, but based on your comments, I think that you are looking for more.

.

Mark,

Kirschenbaum has a "Non-Solicitation" provision in their Security Agreements. In short it states that a Subscriber agrees that it will not solicit for employment for itself or any other entity or employ in any capacity any employee of your company for a period of two years after service to the Subscriber has been completed. If the Subscriber violates the provision your business shall recover from the Subscriber an amount equal to the employee's salary average based upon the three months preceeding employee's termination of employment, times twelve, including injunctive relief and counsel fees.

I have paraphrased what is actually said in the provision. I would encourage you to talk with Kirschenbaum's regarding your contracts/agreements they are very helpful.

Thank You Mr. Lovgren, I will.

It is unlikely anyone would ever take such an action, but it is enough (I think) to have it included in the contract to make them aware, and wary.