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Monitoring employee activity

i found you!A request that comes around a couple of times each year is a client who is looking to monitor the internet activity of their employees. I’ve been helping clients with this for years, but the first place we always start is the employee handbook: do you have a policy to permit your monitoring. Why you ask. According to the trial courts of California, your employees have an implied sense of confidentiality because they use a password on their computer. So, what can you do? A couple of options. One would be to amend your employee handbook. Another would be to have a written computer use policy. Beyond simply settings yourself up to monitor this activity, the mere fact that you publish this policy will be a strong deterrant to your employees.

So, what should you include in this policy…

  • The computer network, servers, computer and internet is the property of the company
  • Information created, stored or transmitted through the company network is subject to inspection and monitoring
  • Personal computer or other technologies, which are connected to the company network are subject to monitoring and inspection
  • There is no assumption of confidentiality for any activity taking place on company resources
  • The personal use of the company network is {discourage, prohibited, permitted}
  • The use of the company network for illegal activities, including p2p filesharing, is prohibited
  • Company harrasement policies include electronic forms
  • The company may backup, make copies or otherwise duplicate any information on any equipment connected to the company network
  • Management, at it’s discretion may monitor, track, log or otherwise review the use of the company network, including internet and e-mail activities.

As always, be sure to consult your business attorney before implementing a policy of this nature, as well as before taking any form of monitoring actions towards your employees. The illegal use of monitoring of employee activity may not only nullify any sort of disciplinary action, but may also open your company to legal action

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NON-COMPETITION AGREEMENTS (NCA)

Non-competition agreements have been standard for many trades throughout the capitalistic history. However, at some point California, being an at will employment state ceased to recognize these documents as binding. The logic is that an employer should no be able to restrict a person from taking a traded they know and using their skills at another company. Equally this applies to employees starting their own firms. How many of us have been apprenticed by another, perhaps even working as an employee at their firm.

While the business logic for a NCA is apparent,  California does not enforce these agreements.

So what is an employer of contract services to do to prevent employees from stealing clients from their former employer? There are a couple of things:

First thing is to make your clients a raving fan of your company, it’s model and brand. Your company brand should be disassociated from individuals likes – yes, they should love your people and have a great working relationship with them; however they should love what the company brings to them even more. Beyond simply avoiding problems with former employees, or even simply because of great customer service; this can make it much easier to exit your company (sell, merge, etc) when the time comes.

Next, market your customers with the value of a larger company (or simply larger than an independent contractor) – such as greater stability, higher availability, diverse skill sets, etc.

Third, remind your staff of the high costs of doing business, the value you provide to them: job and income stability, benefits, holiday and vacations (even if unpaid, they have a job to come back to – try taking a 2 week vacation from your contract clients without problems), administrative and business services — they can simply focus on their trade instead of the business end of things.

Finally, you can bind your clients in their contracts to not recruit, hire or retain your employees, former employees or contractors during the duration of their contract with you, and perhaps 1 year thereafter. This can simply be placed in line with your regular contract terms, but you also want to include two important elements: (1) a stated minimum monetary amount (we placed it at 50% of the annual salary of their regular technician) and (2) a provision for you to receive reasonable attorney fees. Most clients will understand this in the onset of an agreement. You can also gently remind your employees about it – in a non-threatening way.

Now failing all of these, you can likely litigate with your former employees because they’ll likely violate terms of their non-disclosure agreements. But proving this and determining a monetary damages could be difficult.

Realize that this does not prevent this from happening, but rather it is a big deterrent. You also still need to collect from them, which will take much longer than you would expect. With major clients this could be devastating to a company. What would happen if your employee was able to woo your largest client away? How would this affect your business if you could not collect any monetary damages from anyone for 24 months?

We recommend being proactive by making sure that your clients are happy and fiercely loyal. Second to that is having your contacts reviewed by a business trial lawyer.

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This is not intended to be specific legal advise, but general information and a guide to help you work with your professional team including lawyers to provide the correct amount of protection for your company. This is part of a 4 week series which came out of a luncheon discussion with several close business associates of mine.

Getting Started with Corporate Procedures

Last week I was having lunch with a business associate who owns a computer consulting firm in the East Bay Area. We were discussing the way his business works with Corporate Procedures for their business operations. As a small business typically we begin with one person per task, and they are an expert at what they do, more because they created their process. However, as a company grows we begin to delegate tasks and then eventually form teams of people who do the same processes. At this point, it becomes important to have a written procedure.

Procedure manuals can become large an tedious. For the small business, it is important to scale your procedures – even beginning with the very simplest bits of information. We have seen employees come to the owner/manager/etc and sometimes say, “their should be a procedure” or other-times, it is more simply stated, how do I do this task. Those should be the indicator to begin a written procedure policy.

It does not need to be something complicated. Even a simple: 1-2-3 checklist of bullet items – no detail. But begin somewhere. Start simple and as the needs grow, expand your documentation.

What you don’t need to do is replace formal education, industry standard training or other certifications with documentation. In the computer consulting industry, your technicians should know “how” to create a user, or setup a “security group” — but as a company you may have established a “methodology” that you want to remain consistent.

Another good example is creating checklists — such as a Quality Assurance – before we return a computer to the customer, we will always check….bla, bla, bla.

As a small company, really there is no hierarchy, nor is their a technical writer. So what I’ve helped some business associates do is to setup a wiki, such as MediaWiki and permit all of their employees to add content to their hearts delight. It is search-able, and has great version control. You can then empower them, if they think there should be a policy, they can create it. Even if it is a simple 3 bullet point list of what you need to know when…

Begin with a culture of documentation early. There is no need to perfect it, just start getting procedures down on paper. Let it grow from there. Commit to spending 15 minutes per day, or at least an hour per week contributing and growing what you have. Brain dump your knowledge. Once it becomes something used frequently by your staff, you’ll find you have a bit more time — and your employees will be more empowered with the information and knowledge they need.

The cost of litigation

When parties cannot resolve a situation outside of the courtroom, the winning party has already been declared — the attorneys. With all respect to their professions, both parties ultimately end up loosing in court. Yes, one of them will walk out of a courtroom as the prevailing party, however even they loose. Their cost of time and money, distraction and emotional input cannot be recovered.

Beyond your own personal loss, there is also the possibility of public and customer prospective. Regardless of who wins, the fact that your company is involved in a case may cause your customers to become uneasy. If you’re bringing action against a client, it will cause your other clients to be weary, likewise if your going after a former employee. Alternately, if you are the target of an action, then they may hear more about the false claims or acquisitions, well before they hear the outcome of the litigation.

The best way to resolve all situations is outside of the courtroom. If that takes place informally, or perhaps through a formal mediation service. Finally, there is always the opportunity for a last ditch effort on the day of court.

Finally, be fully aware of what you are willing to accept – and what areas are open to compromise. Be realistic about your expectations. Obviously they already know your demands, so you will not likely have all of your needs met, so decide was you’d be willing to flex on.