Last week, we examined the first in a series of mistakes that Startups commonly make when hiring employees. (You can read that post here). Now we examine another mistake Startups commonly make:
Failing to evaluate a new employee’s previous employment details.
Here are some questions that may not be at the top of your list when hiring a new employee. At the time of hire, is your new employee violating a noncompetition agreement that they agreed to with their previous employer? Are they improperly soliciting clients from their previous employer? Did they bring any intellectual property that would constitute a trade secret violation? While a court may eventually rule that a noncompetition or nonsolicitation agreement is invalid, that doesn’t mean that your business doesn’t have to fund a defense for hiring an employee who originally signed said agreement. Performing a simple audit of new hires can save your startup a lot of costs in the long-run if a new hire is shackled by previous covenants.
Next week we will examine the importance properly classifying employees and independent contractors.
This post is not intended to be legal or tax advice. Formeller & Formeller LLP’s Chicago startup attorneys have helped numerous clients form and operate their businesses. Our skilled Chicago attorneys can help counsel you with employment issues and assist you with establishing proper employment hiring and employee management procedures . Please contact our law firm today for a free legal consultation if you would like to discuss employment or operational issues.
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