Yaneek Page | Managing Sabotage! What to do when clients steal your workers

QUESTION: We are in the construction industry and recently discovered that our lead workman has been poached by one of our most valuable clients. This represents a substantial portion of our business because of large, recurring contracts. This is common in our industry. The employee has a critical role in our business and this action has caused significant disruption in business, delayed projects, loss of income, the threat of legal action from our clients and also the cost of training a suitable replacement. How should I proceed in this case and also to safeguard my business from a recurrence?

– Business owner

BUSINESSWISE: What your client did wasn’t just disrespectful, it was a strategic blow below the belt. Poaching your top talent is striking at the heart of your project execution, and they knew fully well it would hurt your company.

Let us be clear: dishonest clients will always come to the table with dirty hands, and are always bad for business. However, as you acknowledged, this is not new. It’s common in construction and other sectors, where people pilfer labour, intellectual property and scarce resources, with smiles on their faces.

The naked truth is that with Jamaica’s small market, justice system and low social trust: what’s legal, what’s ethical, and what’s enforceable can be three very different things.

So, let’s talk about your options to handle this strategically. An important caveat is you need to speak with an attorney asap.

1. Acknowledge vulnerabilities and fix them

Your client identified a key player in your workforce, directly solicited him, and used your own human capital to cripple your ability to deliver their job. Unfortunately, you have no written contract with the worker, no non-solicitation clause with your client, and no documentation of specific damages, so legally, your hands may be tied - for now. Although their actions are foul, and there’s potentially a case of economic tortious interference, it won’t hold up in court unless you can prove:

• There was an existing business relationship;

• The client knew and intentionally interfered with that relationship; and

• That interference caused real, documented financial loss.

Without solid evidence, it’s an uphill battle for justice. If you pursue legal recourse pre-emptively, you’re guaranteed more stress, time and expenses, but never guaranteed success.

2. Clap back with strategy

As you weigh legal options, keep your cool & begin documenting everything - missed deadlines, all verbal statements, changes in site availability, and evidence that your worker is now working directly for the client. Even if you never go to court, this may protect you if things escalate.

Also, critically assess your position vis-a-vis your existing contract. In other words, are you bound by certain timelines or deliverables? If so, mitigate by crafting your defence, outlining how you have been sabotaged.

Your client may even be trying to avoid paying you entirely with these unscrupulous manoeuvres. If they are threatening legal action, then send them a formal, written response reviewed by your lawyer.

Be polite, but firm. Make it clear that the disruption was caused by unexpected shift in labour dynamics, not initiated by you. Let them know you reserve the right to disclose the main contributing factors if they decide to escalate the matter.

3. Guard your reputation

If you can, finish the project, and finish it strong. Reputation is currency in Jamaica, and bad word seems to travel faster than light. Protect your name by maintaining your professionalism as you plan for the future.

4. Make your business sabotage-proof

Execute bullet-proof contracts to protect your company against this type of sabotage in the future. Everyone needs to sign a contract, even if they’re not full-time employees. By that I mean every skilled worker, subcontractor or part-time crew on your site – or working under your supervision – should sign an agreement. Key elements include:

• Terms and conditions of payment;

• Performance expectations

• Site assignments

• A non-solicitation clause barring clients from hiring them directly during or after the project; and

• A notice period for withdrawal

Check with your lawyer for the appropriate verbiage, or to look over your contracts if you don’t have the budget for them to write it from scratch.

Another way to make your business sabotage proof is to update your client contracts. They should include a non-solicitation clause preventing clients from poaching workers or hiring without written consent; a penalty clause for breaches, for example, paying a fee of 25 per cent of the worker’s annualised value to your company; and finally, a termination clause that specifically protects you if they undermine your ability to deliver.

This is normal business practice in other jurisdictions. Remember informality can ruin your livelihood.

5. Build redundancy

You have a major vulnerability that must be fixed: no single skilled worker should have the power to paralyse your company. I understand the considerable investment made in training and upskilling that worker, but if one person’s absence can cripple your workflow, the business is too exposed.

Budget for and invest in cross-training, even if it slows things down short-term, and results in increased costs to be borne by your clients.

6. Build worker/contractor loyalty

This one is admittedly one of the hardest because good contractors are hard to find. However, it’s harder to poach if you treat them well. Up the ante! Offer priority placements on jobs, bonuses for reliability and clear growth paths and recognition. In a low-trust society loyalty is hard earned, but where it exists it should be richly rewarded.

Remember, if the game is rigged against you, you must change how you play. You’re in a cut-throat business. You must move as though everyone will one day betray you and prepare accordingly.

It’s frustrating and upsetting, but don’t get bogged down trying to get even. Instead use this experience as a lesson to get ahead.

One love!

Yaneek Page is the programme lead for Market Entry USA, and a certified trainer in entrepreneurship.yaneek.page@gmail.com