Stay competitive and avoid secret-sharing concerns

Small businesses are typically highly entrepreneurial, either as a by-product of the owner or the industry, or out of necessity for survival. Regardless, these businesses frequently have great ideas that could potentially walk out the door with an employee who finds a better-paying job at a larger organization.

What’s a small business to do?

If you want to protect your unique ideas and competitive advantage, it does not necessarily require a large cash outlay in court after the fact (of your employee leaving and talking). Instead, take a look at your hiring and on-boarding strategy, as well as your employee handbook, and your opportunities to protect yourself may be simpler than you realized!

Hiring and on-boarding:

• Understand the nature of your business and ask behavioral questions during the interview process that explore candidates’ ethics and character. Ask “what if” questions that explore how candidates would respond to potential scenarios. Make the situations moderately complex so the answer is not always an obvious answer that anyone with any sense would give lip-service to when answering.
• Once you decide to hire someone, make an offer of employment contingent on reference and background checks. At this time, and not before, check with previous employers and co-workers about a candidate’s character (as well as work habits), invest in a basic background check service to conduct a background check (review the results carefully), and do a general scan of public information on the Internet and social media sites.*
• Require all new-hires to sign a non-disclosure and non-compete document. Of course, you can’t police someone all the time, and the difficulty in monitoring what people say after they terminate employment increases exponentially. However, if the situation arises in which you find your employees or former employees sharing information that is otherwise proprietary and protected, you have recourse via this signed document and you certainly have undeniable proof that the employee committed to keeping his or her mouth shut. (Work closely with your employment or business attorney to draft your non-disclosure and non-compete to ensure it will stand up against legal scrutiny and that it does not cross the line of reasonableness in terms of what constitutes competition and an employee being able to make a living.)
• Don’t just hand the employee handbook to your new employee and let him or her read it at leisure and come back to you with questions IF there are any. Instead, review key policies with your new employee as part of the orientation process. Make sure you focus on those that require the employee to sign additional forms (such as a non-compete), are particularly sensitive or unusual, or those that might cause resistance. Make sure you explain WHY you have adopted these policies. (WHY always makes the medicine go down a bit easier.) Finally, make sure every employee signs a document that states they have received the handbook and understand they are responsible for reviewing it and following up with their managers to clarify anything that needs clarifying. This receipt should NOT be a statement that the employees agree with the contents of the handbook, only that the employees have received he handbook and maintain accountability for reviewing it.
• Document any technology the new employee has been given access to as part of the employee’s file. I encourage my clients to build files that include a hiring checklist, in which this type of information is noted. I find these folders are great because an employer can organize an employee’s file based on several pre-determined categories, and the hiring checklist can be hole-punched and popped into the first tab. On this checklist, SPECIFICALLY note any technology access you have provided, as well as any copies of software or any hardware (including phones) you provided to the employee. Include VPN, if you provide it for employees to work remotely. Note serial numbers, models, etc. as needed.

Employee handbook:

• Write clear policies for your handbook that explain what is considered proprietary information and what constitutes professional behavior and company expectations.
• Include a technology and social media acceptable use policy in your manual that outlines how employees may use your company-provided resources, and what they should avoid. For example, I would suggest that it is required that all company business be conducted through company-approved channels only (such as the employee-issued email accounts instead of personal email accounts). Also disclose that the employer retains the right to review user activity and that users should not expect their communications through these channels to be private.
• Ensure that one of your policies indicates that employees are NOT allowed to send/email digital copies or remove hard copies of information from the workplace (such as contracts, proprietary training documents, sensitive document, etc.)
• Work with your employment or small business attorney to develop policies that protect your business the best, yet allow for the greatest flexibility for your employees to get their work done and stay engaged.

Separation:

Everybody leaves at some point–some voluntarily and some not-so-voluntarily. Either way, as an employer, you need to be strategic in how you prepare for someone’s departure.

• Clearly determine the departure time and day of the employee and communicate this to whomever manages your IT, computer access, etc.
• Once you have confirmed this information, then work closely with IT to time the shut down of access to these resources. Particularly in a non-voluntary departure, an employee should not be able to access work-provided resources after termination. If there is a unique reason the person does need to access his or her computer, it should only be with a supervisor or you present.
• Utilize an exit checklist (it should mirror your hiring checklist) to ensure you get back any software, hardware, access codes and equipment you provided to the employee. Compare serial numbers, etc. to ensure you received the same equipment as issued.
• At the time of departure or earlier, ensure that the employee hands you everything. Do not arrange to have the employee come back at a later time (except in unique circumstances) to turn over a company phone, computer, etc. The employee should already have these in his or her possession.

* NEVER require a candidate to provide private passwords to their social media sites or other digital or private information. Also, never jump to conclusions. If you find something online, you need to present your findings to a candidate and allow them to rebut your findings. Sometimes, the answer is as simple as mistaken identity.

Even small employers can protect themselves like a big company if they take simple precautionary steps and implement basic processes from the first day they hire an employee. Always work with an attorney or HR professional to ensure the greatest success.