Just last month, Mr. Bako the head baker of BakePlus Bakery stopped showing up at the bakery without notice…basically terminating his employment at will. To add insult to injury, he opened a small bakery just two shops away from BakePlus selling same varieties as Bakeplus, using same logo of BakePlus but with the name BakePluzz, at a cheaper price. BakePlus believed that as a small business, they did not need an employment contract, hence Mr. Bako and other employees had no contract.

Let’s look at what BakePlus could have done differently:

  1. Ensure that there is a comprehensive employment contract in place that binds both BakePlus and each individual staff member which includes terms such as job description, non-solicitation, non-compete, procedure for termination of employment, disciplinary actions amongst other terms.
  2. The Non-Compete clause would provide that any employee during his or employment at BakePlus and after his or her employment has been terminated shall not compete against BakePlus within a certain location and period of time.
  3. In addition to an employment contract, BakePlus could have also gone ahead to develop an employment handbook which will be equally binding on all staff members.
  4. Another way to ensure staff compliance to rules and contract clause is to constantly train them on their roles, legal clauses in the agreements and the implication of same.
  5. Termination of employees are done in writing as provided by the Labour Act. The former employees who had left would have had to put their notices in paper, hence affording BakePlus enough time to find a replacement.
  6. BakePlus being a brand name also needs to register its trademark to lay exclusive right to the use of the name.

It is a wrong notion that startups and small businesses need little or no legal considerations for scale. Small businesses like big corporations need to protect their business interests through lawyers in the following areas employment regulations, taxation matters, navigation of complex business transactions with third parties amongst other functions that are valuable to businesses as they grow.

We at Audrey Law are committed to helping small businesses scale using legal structures and measures.

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