the startups.com platform about startups.comCheck out the new Startups.com - A Comprehensive Startup University
Education
Planning
Mentors
Funding
Customers
Assistants
Clarity
Categories
Business
Sales & Marketing
Funding
Product & Design
Technology
Skills & Management
Industries
Other
Business
Career Advice
Branding
Financial Consulting
Customer Engagement
Strategy
Sectors
Getting Started
Human Resources
Business Development
Legal
Other
Sales & Marketing
Social Media Marketing
Search Engine Optimization
Public Relations
Branding
Publishing
Inbound Marketing
Email Marketing
Copywriting
Growth Strategy
Search Engine Marketing
Sales & Lead Generation
Advertising
Other
Funding
Crowdfunding
Kickstarter
Venture Capital
Finance
Bootstrapping
Nonprofit
Other
Product & Design
Identity
User Experience
Lean Startup
Product Management
Metrics & Analytics
Other
Technology
WordPress
Software Development
Mobile
Ruby
CRM
Innovation
Cloud
Other
Skills & Management
Productivity
Entrepreneurship
Public Speaking
Leadership
Coaching
Other
Industries
SaaS
E-commerce
Education
Real Estate
Restaurant & Retail
Marketplaces
Nonprofit
Other
Dashboard
Browse Search
Answers
Calls
Inbox
Sign Up Log In

Loading...

Share Answer

Menu
IT Outsourcing: What precautions should a software development agency take to avoid this business loss?
PG
PG
Phillip Grove, Software Services CEO and PM answered:

First, I am not a lawyer.
No-hire and/or non-solicitation clauses can be added to your contract (MSA/PSA). My understanding is they are variably enforceable in different states.
They are generally not enforceable against employees (you are better off developing and maintaining a good relationships with your employees, then trying to force them to do something).
That said, your agreement with your business customers is generally a binding agreement, and should they try to hire your people out from under you, you should have grounds for a lawsuit. Suing your customers has other implications that you may want to consider.
I had a situation where a customer tried to hire one of my employees who had been working on his project for a couple years by that point. He was trying to reduce his expenditures. My employee notified me that this was happening, because we had a good relationship, and I contacted the customer and reminded them of our contract agreements.
This is considered an ethical breach. We weren't providing contract-to-hire headhunter services. Most people who hire vendors understand the distinction, and this customer knew what they were doing (they were being intentionally sneaky about it). At the completion of the contract I fired them as a customer, and moved the employee to another project.

Talk to Phillip Upvote • Share
•••
Share Report

Answer URL

Share Question

  • Share on Twitter
  • Share on LinkedIn
  • Share on Facebook
  • Share on Google+
  • Share by email
About
  • How it Works
  • Success Stories
Experts
  • Become an Expert
  • Find an Expert
Answers
  • Ask a Question
  • Recent Answers
Support
  • Help
  • Terms of Service
Follow

the startups.com platform

Startups Education
Startup Planning
Access Mentors
Secure Funding
Reach Customers
Virtual Assistants

Copyright © 2025 Startups.com. All rights reserved.