For web designers whose web design agency or business is large enough to have employees, they must be aware of the risks that can exist. One of those risks is when an employee leaves, whether that be mutually or following some kind of dispute or unacceptable behaviour that has led to them being dismissed.
In truth, this presents more than one risk as that ex-employee could potentially go on to take actions that can compromise their ex-employers web design business. A prime example is them deciding to set up their own agency and knowing what their ex-employer normally charges clients for web design and maintenance, they contact those clients and under-cut prices. Another is a current employee imparting confidential data to other web design agencies.
Those are just two of many nefarious actions a current or ex-employee might take, and though rare, it is more than worth it to take steps to prevent these sorts of behaviours. One of the legal and legitimate ways to do so is to use non-compete clauses.
Non-compete clauses include stipulations that the employee agrees to when joining a business and prevents them from taking some of the actions that we referred to. As for how web designers can use non-compete clauses to protect their web design business, below are five important ways to do so.
You Must Ensure You Identify The Legitimate Business Interests You Are Trying To Protect
Non-compete clauses must be for legitimate business interests and be fair and reasonable. You cannot simply state that an ex-employee cannot start a web design business of their own nor work for another employer, as they are still entitled to earn a living. However, confidential information about clients, your in-house web design processes, and the operation of your business as a whole are all examples of valid business interests you can seek to protect.
You Can Include Non-Compete Clauses In Employment Contracts
Whilst you can have non-compete clauses as separate documents, it is best practice to include them in your employment contracts. This ensures that you have a legally valid document agreed to and signed by all employees and that they are bound by its terms as part of their employment with you.
Non-Compete Clauses Can Apply To Both During And After A Person’s Employment With You
A misconception is that non-compete clauses only apply whilst an employee is still working for a business but that is not the case. Assuming the correct terms and conditions are included in the non-compete clause, they apply both throughout a person’s employment and after they leave their employment.
Non-Compete Clauses Can Prevent Ex-Employees From Trying To Recruit Your Other Employees
An employee is perfectly entitled to start their own business or join another employer. However, what a non-compete clause will prevent them from doing is approaching your remaining employees and encouraging them to also leave and join them in their new venture or at their new employer’s web design agency.
Non-Compete Clauses Can Prevent Ex-Employees From Trying To Steal Existing Clients From You
Perhaps the greatest concern for web designers when an employee leaves, especially if they were privy to confidential information and data relating to clients, is that they will try to steal those clients away. A non-compete clause can prevent that, although be aware it will not apply forever. Also, the fact is that if a client wishes to move of their own volition from your web design agency to another, there is little to stop them.