Case Study One – The entrepreneurial real estate agency and protecting client data
Problem
Client was a highly successful real estate agency that had expanded rapidly to have several offices across the city. By shear accident, the client discovered that former employees had taken client details from the agency databases prior to moving to competitors and had been contacting them to secure listings.
Issue
The client’s staff were a mixture of employees and contractors. Employees were brought on using basic one page employment agreements with minimal information. Contractors were engaged on what was essentially a handshake deal. The client had grown rapidly and formalising employment paperwork was given a lower priority than ensuring there were adequate staff to meet demand. Without formal agreements, the client could not ensure that they were covered in relation to the use of company confidential information, and were open to challenge in relation to issues such as payment of commissions and/or bonuses. The issue not only threatens profitability through employee fraud and lost clients, but runs the risk of breaching Australian privacy laws.
Solution
We developed a customised employment agreement containing terms relating to the ownership and use of confidential company client information. The employment agreement also contained restraint provisions limiting what departing employees could do post-employment. We also developed a comprehensive independent contractor agreement for contract staff containing similar provisions, and making it clear what other commercial terms (such as commission rates) applied.
We also implemented a staff training program to ensure employees and contractors were aware of the new arrangements, and provided guidance to the client on data protection and data tracking in their information technology systems.
