Employee competitor stories begin like this…
“I think my employee is stealing my business information and is planning on competing with me. What should I do?”
Here is how this “textbook case” often plays out…
- Employee starts a side business using the employer’s resources, methods, client lists, and often client products.
- Employee plans to leave when the new business is self-sustaining.
- Employee quietly recruits other employees.
- Employee leaves, or is discovered and fired.
- Over time, other employees desert and go work for the ringleader, taking even more intellectual property.
- Covert lines of communications remain open between the two businesses: employee chit-chat, room bugs, telephone wiretaps, computer spyware, unauthorized access to email/voicemail, etc.
- The employer takes appropriate investigative/legal steps… or slowly bleeds to death.
Recommendations for stopping an employee competitor:
- Act quickly and firmly.
- Secure personnel records and back them up off-site. Especially important: Non-compete / disclosure agreements, termination agreements, signed copies of company rules, etc.
- Take any collected evidence to an outside attorney to determine a course of action for investigation, employee termination and possible prosecution.
- Document evidence of business diversion. Talk to customers openly, or indirectly. Consider setting up a sting.
- Monitor and back-up the employee’s business e-mails (where legal).
- Conduct a Technical Surveillance Countermeasures (TSCM) survey for electronic surveillance devices and other counterespionage vulnerabilities. Hire the best specialist you can find, even if it means there are some travel expenses. You may only get once chance to do this part correctly. See the post: How to Choose a Competent TSCM (Technical Surveillance Countermeasures) Consultant for assistance.
- As soon as possible, conduct a forensic examination the employee’s company-owned computer devices. (Computers, tablets, smartphones, etc..) Again, hire the best specialist you can find. You may only get once chance to do this part correctly. Contact us at counterespionage.com for assistance if necessary.
- Upon termination of the first rogue employee, conduct interviews with remaining employees, with your attorney’s guidance. Let the remaining employees know the full ramifications of intellectual property theft, and your resolve to protect against all losses.
- Notify customers of personnel changes.
- Quickly, introduce replacement personnel.
- Notify recently departed customers of the situation, and warn them (nicely) of potential ramifications (if any) from dealing with renegade employees.
- Develop a marketing device to keep your remaining customers loyal.
- Monitor the competition for future espionage attempts.
Your situation may require additional, or alternate, steps. Partner with a counterespionage specialist for investigative advice, and your attorney for legal advice.
If you have any questions, or would like to discuss a TSCM inspection of your location, please feel free to contact me.
Kevin D. Murray CPP, CISM, CFE is a business counterespionage consultant and TSCM specialist with over four decades of experience.
Murray Associates is an independent security consulting firm, providing eavesdropping detection and counterespionage services to business, government and at-risk individuals.
Headquartered in the New York metropolitan area, a Murray Associates team can assist you quickly, anywhere in the United States, and internationally.