Cover of Should MSP Agreements Stop Ex-Employees From Taking Clients?

Should MSP Agreements Stop Ex-Employees From Taking Clients?

Should MSP Agreements Stop Ex-Employees From Taking Clients?

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Employee departures and the risk of client solicitation by ex-staff emerged as the episode’s principal issue. Multiple instances were described where former employees attempted to take clients with them, resulting in legal disputes and operational stress for MSPs. To mitigate this risk, contractual safeguards such as non-disclosure and non-solicitation clauses in employment agreements were identified as standard practices. The discussion emphasized the limitations of these measures, especially in right-to-work states like California and Michigan, where prohibiting employees from earning a living is not permitted, but protecting trade secrets and customer relationships remains crucial.Further supporting commentary outlined approaches to both prevention and response. Hiring staff aligned with core business values was highlighted as a first line of defense, acknowledging that even well-selected employees may at times violate trust. Emphasis was also placed on maintaining strong client relationships, as clients themselves may resist overtures from ex-employees and alert the business to solicitation attempts. The balance between proactive oversight and acceptance of limited risk was positioned as a key operational consideration, with practical actions centered on the clarity of employment agreements and ongoing relationship management.Additional segments addressed opportunities for increasing monthly recurring revenue (MRR) and the growing prominence of AI and related security and governance issues. Strategies for broadening MRR included packaging not only core IT support but also ancillary services such as printer management, mobile device support, and surveillance system maintenance. The conversation also covered the rising importance of including AI usage clauses in NDAs, particularly for M&A transactions where confidential business data might be shared with AI platforms. Concerns were raised about the exposure of proprietary information if uploaded to external AI providers and the need for specific contractual language to address this risk.For MSPs, the key takeaways center on operational risk containment, the necessity for disciplined employment and client contracts, and governance practices attuned to both human resource management and technology adoption. Service providers are urged to strengthen their policies and agreements to protect confidential information and client relationships, remain vigilant regarding the transfer or misuse of business data—especially in digital and AI-driven environments—and consider the broader implications of their vendor and partnership decisions during organizational transitions or M&A activity.Protecting Your MSP from Ex-Employees and Growing MRRShow Rundown & Banter: Protecting clients and employees from poaching, growing MRR, AI security concerns, and AI in M&A.Question of the Week: Have Ex-Employees Ever Stolen Clients or Staff?Use non-solicitation agreements, employee contracts, and signed handbook acknowledgments to protect your business.Topic: Growing MRR Beyond Core ServicesExplore VOICE, CYBER, MDM, and BACKUP. Reinvent Telecom is one voice partner to consider.Something New: Mac Introduces TouchscreenApple explores touchscreen functionality. Is it useful, or is it a feature other platforms have had for years?Topic: AI Security and ConsciousnessDiscuss concerns around Claude, AI consciousness, and Anthropic’s conversations with religious leaders.https://youtu.be/TBLHdXABwAg?si=upyYBVLm7Set5YXeTopic: AI Clauses in M&A NDAsA seller’s NDA prohibits uploading confidential financial documents to free AI chatbots that may train on user inputs.Tales from the Field: Selling Your MSP to an Inexperienced VC GroupWhat can go wrong when selling to investors without MSP experience?Wrap & Upcoming EventsMastermind LIVE Tampa, December 3–4, 2026.https://kernanconsulting-mastermind.mykajabi.com/mastermind-event About the SMB Community Podcast: Weekly business advice for small MSP owners from Amy Babinchak and James Kernan of the Small Biz Thoughts community — MSP sales, MSP pricing and agreements, hiring and leading an MSP team, MSP operations, selling your MSP, and AI for small MSPs. Produced by MSP Radio. More for MSP owners at smallbizthoughts.com.SMB Community Podcast is supported by our partners:OvekaSupporting the IT services community through insights, analysis, and transparency. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.
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