What Can I Do If My Employee Is Stealing My Customers?

In the world of business the employee you now trust can turn to be a bitter rival who will poach half of your customers. It is so much easier for them because they know your enterprise, are aware of your customers, and thus, know what exactly the customers were looking for in your business. This, thus, turns out to be a formidable weapon in case you fire the employee or they quit and find employment elsewhere. Therefore, it is crucial to the success of the business to know how to prevent the exodus of clients at the instigation of a former employee now turned business rival.


Below are the cautionary measures you should take as a business owner to preempt a mass exodus of customers or clients:

Build Total Employee Loyalty

The best way to ward off the theft of customers by former employees is to build unwavering employee loyalty. You can do this by creating a perfect working environment, improving the workstation ergonomics, offering a good pay scale and paying decent wages. This will in turn create very loyal employees who will not waver even with generous perks from a competitor enticing them to jump ship. Some of the things that employees so much crave for are great working conditions, decent pay, flexible working hours, friendly environment, sense of team community and company perks- these entail health schemes, pensions and other bonuses. If you create an idyllic environment for your employees, then they will be less likely to launch out on their own, dragging your customers along with them.

Mount Measures to Protect Intellectual Property and Assets

To safeguard your customers from being stolen by a former employee, then you should mount formidable measures to protect intellectual property and assets. This, therefore, means that you will need to compartmentalize information, have the employees sign non-disclosure agreements, and further ensure that communications and company networks are made secure from any filching or pilfering.

Stealing Customers

However, you need to know that non-compete agreements are not at all times enforceable. It is deemed that no business owns its customers or clients. Customers are very free to choose whichever service providers they deem fit, thus, agreements that prevent them from choosing a service provider of their choice are deemed to be “restraints of trade” and are often struck down by the courts. What you can do, however, is to require all the employees to sign non-solicitation agreements where the employees promise not to contact the firm’s customers or clients for a certain period of time after leaving the company’s employment for whichever particular reason. In contrast with non-compete agreements that prohibit ex-employees from working in the same profession or field within a definite geographical area, the non-solicitation agreements are deemed to be a business’ legitimate efforts to protect itself and goodwill. Thus, courts that would ordinarily strike down non-compete agreements often uphold non-solicitation agreements.

Even if an employee has not signed a non-solicitation agreement, they are still legally liable if they blatantly try to steal the firm’s clients. That is because it is illegal for an employee to steal the trade secrets of the business where he was employed. Usually, a firm’s client list is regarded to be a trade secret, hence an asset to the company. Therefore, if an employee decides to download the business’s client list onto a storage medium, thereafter send an email to everyone on the client list announcing that he has opened a new firm, then you can sue such an employee for stealing your trade secrets. Talking of non-solicitation agreements, though they do not provide long-term protection against client poaching by a former employee, they can buy the business or the company some time to lock its customers down should the employee who normally directly deals with the clients leaves the company.

Employee Stealing Customers

Monitor the Workplace and Workplace Communications

If you install monitoring equipment on the work phones, or introduce surveillance cameras at the point-of-sale, in addition to mounting other security measures, the employees in your business are less likely going to risk getting caught stealing your customers. If the employees are much aware that you are carefully guarding company assets, and they are also aware of the consequences and the difficulty they are likely to experience when poaching your clients at the workplace, then they will not accept personal gain from favours given, skimming or back-handers. Cell phone monitoring is particularly crucial because you will be able not only to track and monitor texts, calls, IMs and emails, but you will also keep a handle of your sales force through the use of GPS tracking. It can be a huge disincentive for the employees to go to the clients’ premises behind your back.

Use the Law if an Employee Deliberately Does Something that Is Calculated to Steal Customers

As a business owner you should employ the full force of the law that could include suspensions, disciplinary hearings, dismissal or recourse to the law if any of your workers act inappropriately towards the business, towards the business’ intellectual property or assets, or towards you as the employer. However, make sure you always operate within the confines of employment law, though, do not let any impropriety go unpunished as it will act as an invite for other employees who may be tempted to tread the same path in the future.

Hire Third Parties for Security, Surveillance and Covert Operations
If you feel that an employee may be up to some mischief that may hurt the business, there are 3rd party companies that you can hire to ensure your I.T. software and systems security is up to scratch and not vulnerable to any risks. In addition to employing the services of these IT security companies, you can as well deploy the monitoring solutions outlined above to synergistically act with this measure. The monitoring solutions can be procured and installed to computers, cell phones, and any other communication equipment of the company. If push comes to shove and you feel that it is necessary to employ covert surveillance operations against a worker who you strongly feel is out to undermine your business, then do it but remember to remain within the confines of the law.
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I was recommended by my friend Edmund to try Lawyer Singapore. Ivan was very friendly and gave us very good and sound advice. We managed to get back what we lost. Thank you for your help. You guys are certainly  very knowledgeable. Highly recommended!
Mr Elvin Yeo
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