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You should always have a non-compete / non disclosure in place with any employees that have access to trade secrets and the like. That said, you can't rely on fear of legal action to keep your people loyal. Well, you can, fear is a powerful motivator, but if you in an environment of fear you breed resentment.
I've found if you treat your employees right, you will rarely have anything to worry about. It's hard to cook everything down into one post but I guess in a nutshell be accessable, dont treat your people like mushrooms (feeding them shit and keeping them in the dark), keep them in the know about major happenings in business and company performance, they need to feel emotionally invested in your company's success. Quantify everything, give recognition for outstanding effort and provide rewards based on performance. Don't just give a christmas bonus, base the bonus on how the company has performed thoughout the year. Your employees should feel that they are valued members of a team working towards a common goal.
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