Report on ITA Breakout Session – Preventing the Loss of Customers

This is the third in a series of postings about my thoughts from sessions that I attended at the Information Technology Alliance’s Fall Collaborative (<—I love that word) held in Palm Springs.

The session was less about the loss of customers and more about having solid non-solicitation and non-compete agreements with both customers and employees.

This is the second time I have seen New York attorney, Joel Greenwald present. He is very good and his content is extremely relevant to all small businesses. Some of his thoughts were:

  • The law is slow, but it catching up from a technology perspective.
  • Sometimes customer lists are trade secrets, sometimes they are not. It depends on how your treat the lists.
  • Having a non-compete is more prevalent than ever. They should be tight, reasonable in geography and duration and only signed by key employees.
  • Non-solicitation agreements (employees and clients) are more enforceable. Again, he recommends only key employees sign them.
  • However, everyone in a firm should sign confidentiality agreements.
  • Contracts should have severability clauses that allow the judge to invalidate one section without throwing the entire agreement out.
  • Do not include these agreements in offer letters and do not make them part of your handbook.
  • Tell job candidates not to disclose trade secrets from their current or former employers and ask them to sign as to whether they have signed any agreements.
  • All these documents are meant as deterrents not as litigation tool.
  • All companies should have a computer usage policy that is signed off separately from the handbook. This is similar to any sexual harassment policy as well.
  • Monitoring and accessing email on company computers are two different things. Monitoring is OK in almost all circumstances; accessing is less clear.
  • “Never punish people via the withholding of wages. Ever… it is really a bad idea.”

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