Top 10 Things to Do When an Employee Resigns to Join a Competitor

From the HR blog at TLNT.
Michael Greco is a Partner in the Philadelphia office of Fisher & Phillips. (From the HR blog at TLNT.)

When an employee resigns to join a competitor, it is important to respond promptly.

Odds are that the employee has been orchestrating his or her departure for weeks or months. The security of your trade secrets and/or customer relationships may have already been compromised. It is important to act quickly.

Here are some things to keep in mind:

Article Continues Below
  1. Discontinue remote electronic access — The traditional office is no longer confined to the walls surrounding an employee’s desk. Employees access their computers and voice mail from remote locations. It is important to immediately discontinue a departing employee’s electronic access. Doing so can bolster an employer’s ability to seek trade secret protection for its information, and it can limit the ability of a former employee to electronically misappropriate key information.
  2. Ensure return of records and property — Departing employees, particularly long time employees, may have acquired company records in hard or electronic form over a period of years. Employers are well advised to seek written confirmation from departing employees that all such records and information obtained as a result of their employment with the company have been returned, including company information that may reside on electronic devices owned by the employee. Return of all office keys, building access cards, and tangible property should also be required.
  3. Freeze usage of employee’s computer — When an employee resigns, it is not always possible to know immediately whether the employee presents an unfair competitive threat. It may be a few weeks before an employer learns that the former employee engaged in misconduct. Computers previously used by the former employee can be a valuable tool when conducting an after-the-fact investigation, but key evidence can be lost (e.g., overwritten or deleted) if the employer has continued to use the former employee’s computer. For this reason, a former employee’s computer should be removed from active use if there is any suspicion that a former employee poses a competitive threat. If this is not feasible, making a forensic image of the computer presents another alternative.
  4. Exit interview — If the departing employee is willing, the employer should conduct an exit interview during which the employee is asked about future employment plans, reminded of contractual obligations (such as non-competes or confidentiality agreements), and requested to return all property of the employer.
  5. Check computers — Employees often plan departures months in advance. Key files and information can be emailed to a private e-mail address or downloaded to a flash drive with the stroke of a few buttons. Unusual emails or bulk transfers can provide an employer with an indication that departing employees may not have the best of intentions.
  6. Transition clients — Clients should be assigned new company contacts as soon as possible. This will enhance the employer’s chances of solidifying and maintaining the client relationship, and may uncover evidence of the former employee’s misconduct such as a breach of a non-solicitation agreement.
  7. Interview co-workers — Departing employees often talk to their co-workers. In these discussions, they may foreshadow their post-employment intentions, reveal prior misconduct, or perhaps they may attempt to recruit co-workers for the benefit of their new employers. Co-workers can be a valuable source of information for the investigating former employer.
  8. Online social media — If a former employee’s misconduct or candor is in question, former employers might consider reviewing statements made by former employees on online social media. These outlets are sometimes used by departing employees to contact former clients or to post confidential information.
  9. Notify former employee of contractual obligations — Departing employees should be reminded immediately in writing of any contractual obligations they may have (e.g., non-competition and non-disclosure agreements), advised that the employer takes these obligations seriously, and provided a written copy of their agreements.
  10. Scan files — A former employee’s files should be reviewed to determine whether anything appears to be missing or destroyed.

This was originally published on Fisher & Phillips Non-Compete and Trade Secrets blog.

Mike Greco is a partner in the Philadelphia office of the law firm Fisher & Phillips. He litigates and provides counseling nationwide to employers concerning legal claims and issues arising from the movement of employees between competitor firms. Mike has prosecuted and defended more than 300 employee defection and recruitment matters, obtaining and defeating injunctive relief in at least 27 different state and federal courts. Contact him at


4 Comments on “Top 10 Things to Do When an Employee Resigns to Join a Competitor

  1. This article is very good and I beleive it´s a perfect guide for a lot of us that have remote employees. I´m sseing a lot of good people leaving their current jobs to the competitor especially out of US, like Canada, Brazil and other markets where the market place are on a good time. The main reason is benefit cuts and no Salaries even promotion happened over the last 2 years. What does the American companies doing to avoid the lose of great talent. I´m seeing if we continue on this accelerated move of great tallent lot´s of companies will lose their brains and will have tons of new people. I´m not telling theý´re not good enough, but they do not have seniority.

  2. Don't forget to say thank you! If they were a great worker and going away to a competitor it can probably be assumed they are going to be great for the competitor. Being nice not only helps build trust that you won't have to sue but may also encourage them to come back in the future!

  3. This sounds like a police investigation!

    In my opinion, if a valuable employee leaves for the competition, it obviously means that your HR department is not so great and one of the things to do would be to think about that.

  4. I especially love 7. Interview co-workers. Wouldn’t you just love to be called into that meeting! HR: “Did Jane ever mention that she was interested in Acme Widgets?” Employee: “Not that I can recall” HR: “Well that is interesting Russell, because John told us that you know Daphne at Acme Widgets and he heard you and Jane discussing their products!” Employee: “Well, we do discuss competitors to better serve our” HR: “Sorry to cut across you there Russell, I would just like you sign this polygraph consent form while I go and get the device, nothing to worry about it’s all part of our ‘get to know your employees better program'”

Leave a Comment

Your email address will not be published. Required fields are marked *