Dear Cathy, I own a fashion design business. I studied fashion extensively. I draw the designs from which my tailors stitch the clothes. This is my second fashion design business. I had to close down the first one after my tailors betrayed me. They set up a similar business right next to mine and began making cheaper clothes using my designs. What is more, they contacted all my clients and peddled falsehoods about me. As a result, they took off with most of my clients. Now I am cautious. What advice do you have on how to guard me against such incidents with my new staff? Tracy
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Dear Tracy, what you have described here is one of the most painful experiences an entrepreneur can have. Painful as it is, it is a common occurrence in many businesses, especially in the creative sector.
Feelings aside, let us look at preventive and redemptive measures.
The question I get from many creatives who are the “brains” behind the business, is how to protect themselves from unfaithful staff. Other than the beauty sector, businesses that may face this challenge include restaurants where the owner is also the idea generator’.
The good news is that there is a way out.
When hiring staff, you must have a contract. (More of that in my upcoming columns). However, you must protect yourself using a well-drafted contract. In so far as your inquiry is concerned, I would recommend the inclusion of confidentiality clauses and restrictive clauses.
This means that staff is not allowed to share any information belonging to your business with unauthorised persons. The obligation remains even after they exit your business.
A restrictive clause limits certain actions from being undertaken by existing staff. For example, you may place geographical limits such that they would not be permitted to open a similar business next to you.
Another way a restrictive clause can be used is to limit exiting staff from directly poaching your clients.
Are your former staff peddling damaging accusations against you? You can take action and sue them for defamation if the information contained is false. I watched a movie in which the personal assistant would slander her boss and the business whenever she received new inquiries.
She told the caller that she was opening her own business and would give a better rate. Did you know that such actions are actionable? If you are up to a fight, then you can take your fight to court.
Intellectual property
Another way to protect yourself is by using intellectual property.
Information belonging to the business such as client information and designs form a part of intellectual property known as trade secrets. I would advise you to be strategic in how you share this information.
Is it really necessary for your tailors to have your clients’ numbers?
In addition to trade secrets, you can protect your designs through intellectual property. If your tailors “steal” your designs, then you can pursue them for copyright infringement.
To access this right, you must at least draw or record your design in tangible form.
If your designs are so unique and if you can afford them, you can further cement your position through the registration of industrial designs.
