From Financial Post · Howard Levitt · · 1m 10s
Top Employee Joins Competitor With Business Plan
Tech company loses competitive edge after key sales leader leaves for rival.
In brief
Tech company loses competitive edge after key sales leader leaves for rival. A tech company lost its competitive advantage when its head of sales resigned to join a competitor, taking business plans and customer relationships. Originally reported by Financial Post.
Head of sales resigns
A technology company loses competitive advantage when its head of sales resigns to join a competitor.
Competitor targets customers
The competitor approaches the same customers, pitches against the same product and offers prices suspiciously calibrated to the company’s business.
Employment law problem
Businesses often recognize too late that their most valuable employees become their most costly departures.
Standard contracts fail
Standard employment agreements are not designed for employees who are integral to the company’s competitive position.
Non-competition clauses prohibited
Ontario’s Employment Standards Act prohibits non-competition clauses for most employees.
Confidential information risks
Companies must identify genuinely sensitive information to protect it from employees.
Customer relationships vulnerable
Businesses should protect customer relationships before a key employee resigns.
Intellectual property risks
Tech companies must clarify ownership of employee-created work.
Compensation arrangements
Bonuses and stock options must have clear vesting and post-employment terms.
In short
A tech company lost its competitive advantage when its head of sales resigned to join a competitor, taking business plans and customer relationships.
