We are a small firm and I have always made it a practice to hire independent contractors for our commission only sales positions. They seem to be the most motivated and have the most drive over the course of our sales cycle.
Like most startups, I began this business in my basement and it quickly grew. My first salesperson was brought on when I was overloaded by myself. We will call her "Salesperson A". I knew Salesperson A and had transacted business with her for a couple of years prior to bringing her onboard. Since I did know her and her work ethic, I made the basic mistake of not insisting on having her sign an NCND - a no compete non disclosure document. Frankly, I was too busy enjoying our company growth and though she would be fine. I now consider this a costly rookie mistake.
Salesperson A has always been paid and treated like an independent contractor. We are small enough that she is considered like family.
Fast forward 8 years later and Salesperson A has become our biggest salesperson and the one we rely on for the bulk of our revenue and growth.
During the past year our revenue has declined 59% - much of which I attributed to the economy and our product line. However, it has come to my attention this week that Salesperson A is using our client database and our email system to start booking with customers silently through her own "company". She is using our past client accounts, our email system and our database and then turning around and booking accounts on her own. This diverting of revenue has been a silent and potentially fatal killer and I did not take notice until recently. I did find one of her contracts - completely cloned from ours - word for word - with only the company name and bank account information changed to her. Needless to say this is very sad and I am wondering what I did to cause Salesperson A to do this. She has been like a partner to me and many people thought we were married as we have worked together for so long.
My question is - Salesperson A has a number of leads in the pipeline and through our system that could close any day now. Do I confront her immediately and let her go, or wait to let her go after these leads play out? Also, since she is an independent contractor, does she have any legal right to take our clients and bookings away?
The fact is when I let her go, this will cause a stir in our industry and no doubt is a major shake up to our small firm. So any educated and experienced thoughts on how to handle this will greatly be appreciated. Thank you for your help as I am perplexed!
Like most startups, I began this business in my basement and it quickly grew. My first salesperson was brought on when I was overloaded by myself. We will call her "Salesperson A". I knew Salesperson A and had transacted business with her for a couple of years prior to bringing her onboard. Since I did know her and her work ethic, I made the basic mistake of not insisting on having her sign an NCND - a no compete non disclosure document. Frankly, I was too busy enjoying our company growth and though she would be fine. I now consider this a costly rookie mistake.
Salesperson A has always been paid and treated like an independent contractor. We are small enough that she is considered like family.
Fast forward 8 years later and Salesperson A has become our biggest salesperson and the one we rely on for the bulk of our revenue and growth.
During the past year our revenue has declined 59% - much of which I attributed to the economy and our product line. However, it has come to my attention this week that Salesperson A is using our client database and our email system to start booking with customers silently through her own "company". She is using our past client accounts, our email system and our database and then turning around and booking accounts on her own. This diverting of revenue has been a silent and potentially fatal killer and I did not take notice until recently. I did find one of her contracts - completely cloned from ours - word for word - with only the company name and bank account information changed to her. Needless to say this is very sad and I am wondering what I did to cause Salesperson A to do this. She has been like a partner to me and many people thought we were married as we have worked together for so long.
My question is - Salesperson A has a number of leads in the pipeline and through our system that could close any day now. Do I confront her immediately and let her go, or wait to let her go after these leads play out? Also, since she is an independent contractor, does she have any legal right to take our clients and bookings away?
The fact is when I let her go, this will cause a stir in our industry and no doubt is a major shake up to our small firm. So any educated and experienced thoughts on how to handle this will greatly be appreciated. Thank you for your help as I am perplexed!
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