How protected is your staff from the competition?
BY HEIDI L. RUSSELL
PHOTOS BY RICK DAUGHERTY
It’s a small business owner’s nightmare: Discovering that the competition has “raided” your staff, leaving you with a skeletal crew to run your restaurant. Employee raids are unethical, commonplace and pose a real threat to you. “This sort of thing happens under the radar –– employee to employee –– and bosses are not informed,” says Sally Mounts, president of Auctus Consulting Group, a management consulting firm in Washington, Pennsylvania.
The best defense is an offense, so treat your employees well, train them how to handle a “raider” and take protective legal safeguards, say Mounts and J. Hagood Tighe of Fisher & Phillips law firm in Columbia, South Carolina. Tighe represents several pizza chains across the country in employment matters. Here are six steps to do just that:
Be aware of your competitive landscape. Know where your competitors are geographically because the nearer they are, the higher the chance of a raid, Mounts says. Raiding is more probable in metropolitan areas where people aren’t as likely to know their neighbors and will have fewer scruples about wandering into your establishment, she says. “The organizations more likely to be targeted are those where there are a lot of competitors in a small amount of space. If you have a town where within a five-block radius there are five pizza places, raids are more likely to occur,” Mounts says.
Know your legal rights and recourses. From a legal standpoint, most pizza restaurant owners do not have agreements with employees, who are often hired as “at-will” employees. As a result, the legal recourse is limited, Tighe says. In some states, however, the courts have recognized legal claims when a competitor tries to recruit most or all of another business’s employees, intending substantial harm. “These claims often arise under an unfair trade practices theory,” he says. Additionally, many states allow employers to require non-compete agreements or no raiding agreements, Tighe says. The non-compete agreements prevent an employee from going to work for a competitor for a specific time in a geographic territory. The no-raiding agreements prevent a former employee from attempting to hire your employees for a limited time. Understand, however, that these types of agreements are scrutinized by the courts and can be difficult to enforce “if not properly and narrowly drawn to protect legitimate interests,” Tighe says. “Further, some courts will not prevent raiding unless it is carried out by improper or wrongful means (such as lying to employees by telling them they better leave now, because their current employer is in financial ruin).” Form agreements typically are not enforceable. Instead, they must be customized to fit the need and reviewed by employment counsel, Tighe adds.
Thoroughly discuss raids during employee orientation. It’s important to nip this topic at the get go, Mounts says. “There is no other good time to address it,” she says. Explain that raiding falls into one of the “gray” areas of business that is unethical. “Remember the mantra, ‘forewarned is forearmed.’ A young employee who is approached may feel taken aback and may not know how to handle it. Tell them there is a trend in fast food where people walk off the street and offer jobs to workers. Say, ‘I want you to be aware of that. Don’t be taken aback. It’s not what we condone.’ ”
Take advantage of the close-knit aspect of your business. As a small business owner, you’re one or two steps above your workers and aren’t separated by several layers of management. You have a more tightly-knit, inclusive culture, and it should be easy to get information from your employees, Mounts says. “It’s a good idea to talk to your employees over a lunch period, asking them if they’ve ever been approached or know of anyone who has been. Those stories tend to circulate among peers.” Once a month, have a sit-down meeting over breakfast or lunch, off-site, with each employee. Discuss how things are going with them and with their career. Or, if you employ a larger staff, sit down with the entire group and ask for feedback about your strengths and weaknesses as a boss. This will give employees freedom to discuss what is bothering them and could ultimately prevent them from leaving. “There is safety in numbers,” Mounts explains. “They may tell you: ‘When you’re rushed, you’re impatient.’ Soliciting that feedback will always tell you important information about yourself.”
Lay out the facts. Owners and managers should mentor employees, and the discussion over raids becomes a good “teaching point,” Mounts says. Communicate that you practice “The Golden Rule,” which is that you wouldn’t do this to another business. Employees need to understand that you operate ethically and that raiders do not. Ultimately, they are affected by their boss’s ethics. “For example, if someone offers your worker $3 more per hour, tell them: ‘You’re within your rights to agree to that. However, the industry average is $X per hour, and I’m paying you a dollar more. Someone who is offering you more than that probably has some agenda. If they are stealing workers, what are the chances that they will change the rules down the line and lower your salary after you’ve burned your bridges?’ This gives your employee more of a perspective that there are some that conduct in less than an ethical way,” Mounts says. Also outline other factors to consider: the relationships with management, other employees and that you offer a comfortable place to work.
Discuss consequences with employee if they leave. Draw a line in the sand and stick to it. Explain that although you will write a good job recommendation for them, once they leave, they can’t come back under the circumstances, Mounts says. “You can say to them, ‘If you leave, it tells me that you just care about money, not our family atmosphere. We’ve spent time training you.’ Also tell them, ‘I’m all for fair competition and for you improving your life, but make sure what you’re doing is improving your life. I urge you to talk to whoever works there. See if you like the way they serve customers. Money isn’t everything.’”
Heidi L. Russell is a regular contributor to Pizza Today and lives in Wlmore, Kentucky
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