A Non-Compete Lawyer’s Case for Conducting Exit Interviews (and Five Must-Ask Questions)

Over the past several months, I conducted an informal, and utterly unscientific, poll about exit interviews. Questionable survey methodology aside, my conversations on this topic confirmed my suspicion: Exit interviews have few fans.

There are many reasons for this, but chief among them seems to be doubt on the part of both employers and departing employees that time devoted to exit interviews is well spent. Will a departing employee really be truthful, especially about difficult or sensitive subjects, on her way out the door? Does an employer actually want feedback, especially about hot-button or intractable issues, from someone who has decided to jump ship or may have an ax to grind?

While these questions deserve close and careful consideration, from the perspective of a lawyer who routinely litigates non-compete and other unfair competition matters, exit interviews are a no-brainer. These interviews are an employer’s best, and often only, chance to get out ahead of unfair competition, to ask a departing employee, while she still has incentive to cooperate, about her future plans, to determine whether she engaged in any suspicious behavior leading up to her last day, and to remind her of continuing contractual obligations.

Employers that don’t conduct exit interviews, or that conduct interviews but don’t include any questions focused on unfair competition, frequently have to play catch-up once an employee is gone, evaluating suspected potential claims based on incomplete internet research, costly computer forensics, rumors in the market, and anything the former employee, who sometimes has lawyered up, will voluntarily divulge now that she is no longer within the employer’s control (usually, very little).

Here are five questions that employers seeking to reap the benefits of conducting exit interviews should ask every departing employee:

  1. What are your future employment plans? A departing employee who is considering violating her post-employment non-compete or non-solicit obligations will almost always find ways to avoid discussing future employment plans. Forcing the issue by asking directly about future plans in an exit interview is a win-win for the employer: If the employee owns up to her plan to violate her obligations, the employer is positioned to take action immediately, potentially obtaining relief before any economic damage has accrued. If the employee instead refuses to disclose or misrepresents her future plans, this, too, may be helpful. Refusal to discuss future plans is a red flag, and the departing employee’s actions after separation should be very closely monitored. Misrepresentation, once it is discovered, can be used to strengthen and add context to legal claims asserted by the employer. An employee who “retired” to spend more time with her grandchildren has materially diminished credibility, especially at a TRO hearing, when it turns out that, instead of retiring, she joined a direct competitor the day after her separation.
  2. Do you have any questions about your post-employment contractual obligations? Departing employees frequently don’t remember, sometimes conveniently, sometimes sincerely, signing non-compete agreements at the outset of employment. An exit interview is the perfect time to provide a copy of any applicable agreement, and to explain to departing employees that the company requires strict compliance with all contractual obligations.
  3. Have you downloaded any information from company computers or information systems in weeks leading up to your departure? Departing employees rarely ask permission to download “personal information” from company computers and information systems in connection with an impending separation. The problem is that such employees frequently have a very broad definition of “personal information” that includes company confidential or proprietary information. The best way to avoid this common “misunderstanding” on the part of departing employee is to address it head on in an exit interview.
  4. Have you returned all company property? Confidentiality and non-compete agreements usually contain provisions requiring an employee to return all company property, including company confidential and proprietary information, to the employer when employment terminates. But experience teaches that departing employees rarely do so. During the exit interview, the employer should question the departing employee, in detail and using specific examples, about company information that may remain in her possession. Has she returned all thumb drives? Did she store company information on her phone or in the cloud? Did she ever forward company e-mails to personal e-mail accounts? If the employee has not returned all company information, arrangements for immediate return should be made. And the employer should document all information, especially USB and external hard drives, returned.
  5. How can we reach you? Many employers neglect to ask departing employees for updated contact information. This can handicap the employer’s ability to make contact after separation to raise concerns about unfair competition. The fix is simple: Remember to ask as part of all exit interviews for current mailing address, personal e-mail address, and phone number.