How to Stop Employee Poaching by Competitors
Due to the use of online marketing, business competition is fiercer than ever. This hypercompetitive environment causes many business owners to wonder how to prevent employee poaching by business competitors.. Obviously, this is best accomplished by treating your employees great, paying wages on the higher end of the scale and creating a great workplace with flexibility. Sometimes, however, stronger measures are needed.
Non-Solicitation Clauses: The Pros
Second, you want to have agreements with current employees that minimize the risk. Employers sometimes require their employees to agree to a non-solicitation clause as a condition of employment. These clauses require that the employee agree not to solicit other employees to leave if that employee is ever terminated or quits.
Whether these clauses will be upheld depends on state law. Some states look very unfavorably on any agreement that might prohibit healthy competition while other states attempt to balance employee rights to change jobs with employer rights to develop employees without fear they will become future competitors.
As you might imagine, there is a distinction between a former employee who actively recruits your employees, and one who was approached by your employees. In most states, a former employee will not be charged with violating a non-solicitation clause when he or she did not initiate contact the current employee directly. For example, if one of your employees responds to an advertisement for an open position, that would be viewed differently than a direct solicitation of that employee.
Non-Solicitation Clauses: The Cons
If a non-solicitation clause is found unenforceable, states differ in their approach to adjudicating a dispute between the parties. Some states take a “blue pencil” approach, striking only that part of the agreement. In other states, if the clause is invalidated, the entire agreement may be void and unenforceable.
Dealing with non-solicitation clauses can be tricky. If you’re interested in preventing employee poaching, your best bet is to contact us and we’ll support you in ensuring that your agreements provide maximum protection with minimum risk of loss or liability.
This article is a service of Bridge Law LLP. We are an award-winning law firm that specializes in business and estate planning for clients like you. The goal for every family is to stay educated on all topics like this, avoid probate, avoid estate taxes, and build a legacy for you and your loved ones. What sets our firm apart is that we build lasting, lifelong relationships with our clients. They rely on us to keep them updated, provide sound legal counsel, and be there for them immediately if any problems should ever arise. The best part is we don’t charge hourly fees to our families, so you never have to worry about speaking to us.
If you’re ready to keep your business out of Court, contact us today to schedule an initial consultation.