How to Protect Your Business From an Employee Taking Clients When They Leave
When a key employee resigns, one of the biggest risks is that they walk out the door with your clients, your confidential information, and in some cases your team. For small and medium-sized businesses — especially in industries built on relationships — this can be devastating.
The good news? With the right contracts, systems and early action, you can significantly reduce the risk.
Below is a practical guide from a commercial litigation lawyer on how to protect your business before, during and after an employee exit.
1. Use Proper Employment Contracts and Restraints
Your first and most powerful line of defence is a well-drafted employment contract that includes:
Post-employment restraint clauses
These can prevent a departing employee from:
- Soliciting or accepting work from your clients
- Poaching your staff
- Starting or joining a competing business within a defined area
- Using your confidential information for their own benefit
Courts will enforce these clauses if they are reasonable in time, geography and scope.
Confidentiality obligations
Even long after employment ends, an employee must not misuse client lists, pricing, strategies, processes, work templates or other business-sensitive information.
IP ownership clauses
To ensure anything created during employment — documents, systems, processes, marketing, software — remains yours.
If your contracts haven’t been updated in years or were downloaded from the internet, now is the time to review them.
2. Lock Down Access and Information
Before the employee exits (or immediately once they give notice), ensure you:
- Revoke access to CRM, email, shared drives and internal systems
- Redirect their email
- Secure client lists, active matter files and internal communications
- Confirm the return of all devices and documents
Many disputes arise simply because the business waited too long to lock things down.
3. Watch for Red Flags Before They Leave
Businesses often notice warning signs after the fact. Common red flags include:
- Sudden changes in behaviour
- Unusual exporting of data
- Changes in file access patterns
- Shifts in client communication
- A noticeable drop in performance
If concerns arise, seek legal advice early — not after the damage is done.
4. Take Immediate Action If Client Poaching Starts
If a departing employee is attempting to take clients, the steps you take in the first few days matter. You may be able to:
- Send a solicitor’s letter demanding they stop
- Enforce post-employment restraints
- Seek undertakings
- Apply for urgent injunctions (if serious)
- Notify clients of the situation where appropriate
Taking early, firm action often stops the behaviour quickly — and signals to others that breaches won’t be tolerated.
5. Document Everything
Keep clear records of:
- When the employee resigned
- Their access to systems
- Any suspicious behaviour
- Client communications
- Evidence of poaching attempts
These records are critical if the matter escalates to litigation.
6. Get Your Business ‘Poach-Proof’ Going Forward
The best long-term protection is a combination of strong contracts and strong culture, including:
- Up-to-date employment agreements
- Clear policies around confidential information
- Ongoing HR processes
- A CRM that tracks client contact
- Consistent client ownership across the business
These steps make it far harder for any single employee to walk out with your relationships or revenue.
Need Help Protecting Your Business?
- We assist employers across Australia with:
- Drafting and enforcing restraint clauses
- Acting urgently when staff take clients
- Advising on confidentiality breaches
- Preparing enforceable employment contracts
- Running injunctions where necessary
If you’re concerned an employee may take clients — or you want to protect your business now — contact Twomey Dispute Lawyers for clear, commercial advice.
