Tread Carefully When Hiring from the Competition
Posted June 29th, 2016
Hiring professionals presently employed by your competition is an appealing proposition. These workers have a clear understanding of your industry/market, a demonstrated ability to add value to a company, and skills that are relevant. Plus, by poaching them you add strength to your organization while putting your competition in a position of weaknesses. Be aware, however, that there are risks to this cutthroat recruiting strategy. Here are several tips for sidestepping them.
Map Out Employment Restrictions
Many employment contracts now include clauses restricting departing workers from directly competing against the former employer or from disclosing sensitive information. Take time to fully understand how these restrictions will affect the employee’s abilities once they start working for your company. It may be necessary to tailor the position you offer to work around legally binding restrictions. In other cases, the restrictions might expire soon into the employee’s tenure, thereby creating a relatively minor obstacle.
Understand the Legal Risk
Even if you tread lightly, there is the potential that post-employment restrictions could expose your company to legal risk. It’s essential to understand the nature of this risk because the potential financial costs are significant. First, determine how willing the competition has historically been to bring legal action regarding employment issues. Then, look at applicable state and federal laws, the scope of the restrictions and their enforceability. Finally, review the previous step once more to determine the extent to which the position you’re offering creates opportunities for breach of contract.
Spell Our Your Terms in Writing
If you determine that the risk/reward of poaching someone merits proceeding, be sure to spell out the terms of employment in your offer letter. The letter should define boundaries for how the new employee will use former clients/customers as well as confidential information. The letter should also address whether the company is willing to indemnify the employee if litigation is pursued, and what penalties will be enforced if the new employee uses contacts/information in breach of the terms you have defined.
Protect Your Company Early
The risk of violating post-employment restrictions starts before you make a job offer. It’s not uncommon for employees eager to jump ship to offer up client lists or reference sensitive information in order to demonstrate the kind of value they could bring to your company. This could constitute a breach of contract and put your company in jeopardy before realizing any benefit from the poached employee. Establish ground rules in writing before starting the interview process, and get written confirmation that the potential hire is not subject to any restrictions that have not been disclosed.
The simple way to get around these thorny legal issues is to avoid poaching employees. The right staffing partner can introduce you to motivated talent of the same caliber who are far less encumbered by their work history. To learn more about this efficient option, contact Bayside Solutions.
