It happens to a lot of employer. A bad boss or a boss who is too detached from the feelings of his or her employer can be a motivation to them to open up the same business on their own. If not direct competition, at least to a certain extent competition none the less. There are of course anti-competition rules laid down by the law under Companies Act 1950 in Malaysia for employees not to compete with their company and company asking employees to sign non-competition or confidentiality agreement extending beyond their tenureship in the company, there are a lot of employees who open up a business being in direct competition with their former employer immediately upon their resignation/termination.
Nothing is more apparent in the football field especially in English Premiere League or to a wider scope, the European leagues, where managers and players are fired and then you find them on the opposing side where they will skillfully destroy your team. Arsene Wenger, Alex Ferguson, the One of Chelsea (Abramovich's blue eye boy, once) and a few others. For the managers, they have to contend with the player whom they have motivated and shouted at while being under their command but then see them score goals against that manager's team after they left. The team then also have to face facts when the manager or the player got fired then hired to be on another team within the same league. Or those who is 'stolen' by another team. How can the team ensure the skill that was given to them is not pass around to the 'other' side? In a league where the one who can demand is the manager, it will not be as easy.
In the real world, as in everyday working life where you own a company, like me, there are occasions where ex-employees suddenly quit, even some in 24 hours notice, just to see them plying the same route in the marketing rounds. As I am in the legal business, I have employees who rise further upward in their career when they open up on their own. Most practice a different type of lawyering as my firm is more towards the conveyancing and banking business but most of them become trial lawyers and corporate lawyers. Some went into the corporate sector and even can see how I manage my firm as they are the one who supervise companies such as mine. Some do have the courtesy to have ties with my office but most are not. It seems most think they had it bad while they were working for me as I rely on them to much. To me, I have my own style of doing things and it may not be the best way for me to give too much autonomy to my employees in doing things, especially the lawyers but I believe in people making their own way in life, even work. Unless you f#%k up big time, then I have to do something about that.
So, is it good to have former employees as competitors or do you think it is just another normal business practice all around the world?