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Bite the Hand: Simultaneous departure of key employees and valued clients

art1-9-16Many a business is built upon the foundation of trusted employees interacting closely with suppliers and valuable clients. When employees and their major clients leave at the same time, it can have a crippling effect. In one such matter worked by the team at ResultQuest®, attorneys for a produce wholesaler retained us to investigate the facts and circumstances behind the departure of a key, highly compensated salesperson, followed in short order by the top customer assigned to this individual.

When interviewed, the former employee, who was under a two-year non-compete agreement, claimed to be “burned out” on the produce industry and planning to change professions. The customer declined to be interviewed. Contact with suppliers, on the other hand, resulted in reports that the former employee was buying directly from them.

The investigation ultimately revealed that the salesperson had teamed with the former customer to start a competing produce business. It was uncovered that the two had colluded to undercut the former employer’s prices in order to lure additional customers away—armed with purloined client and price lists.

The evidence gathered in course of our investigation assisted the client in obtaining injunctive relief and prevailing in a civil judgment against the parties. Following the investigation, we assisted in the formulation of a system of tighter controls over proprietary information. The initial damage was done, but thanks to the company’s decision to act quickly, a potentially disastrous result was averted.

When faced with the simultaneous departure of key employees and valued clients, it is important to act quickly and decisively to identify the underlying factors and take measures to mitigate the impact. The specialists at ResultQuest® are skilled in developing a response to such an occurrence.

Call us at 713/781-9040 to find out how we can help.