Here at the Law Office of Vincent Miletti, Esq. and the home of the #UnusuallyMotivated movement, we take pride as a resilient and dependable legal services firm, providing such services in both a traditional and online, web-based environment. With mastered specialization in areas such as Employment and Labor Law, Intellectual Property (IP) (trademark, copyright, patent), Entertainment Law, and e-Commerce (Supply Chain, Distribution, Fulfillment, Standard Legal & Regulatory), we provide a range of legal services including, but not limited to traditional legal representation (litigation, mediation, arbitration, opinion letters, and advisory), non-litigated business legal representation and legal counsel, and unique, online legal services such as smart forms, mobile training, legal marketing, and development.

Still, here at Miletti Law®, we feel obligated to enlighten, educate, and create awareness, free of charge, about how these issues and many others affect our unusually motivated® readers and/or their businesses. Accordingly, to achieve this goal, we have committed ourselves to creating authoritative, trustworthy, & distinctive content. Usually, this content is featured as videos posted on our YouTube Channel https://www.youtube.com/channel/UCtvUryqkkMAJLwrLu2BBt6w and blogs that are published on our website WWW.MILETTILAW.COM. With that, the ball is in your court and you have an effortless obligation to subscribe to the channel and sign up for the Newsletter on the website, which encompasses the best way to ensure that you stay in the loop and feel the positive impact of the knowledge bombs that we drop here!

As the authoritative force in Employment Law, it only seemed right to introduce one of the many upcoming series in which we introduce a variety of topics that looks to educate and deliver in a manner that only Miletti Law® can. To that end, this blog is Part X of our series on “Best Practices for Reducing Litigation Risks when Hiring from Competitors.” In Part IX, we hammered on how an employer may “Ensure the Employee Left former Employer without Incident” in an attempt to minimize and mitigate the risk of litigation for hiring from a competitor. Regarding this practice, we mentioned that employers who wish to hire from competitors should, as a best practice for avoiding, minimizing, and/or mitigating the risk of litigation for hiring from the competitor, enquire about post-employment restrictions and obtain written representations of the same.

As a continuation of this series, we now move our discussion forward by hammering on the importance of “Seeking Full Disclosure from Candidates,” which is another thing the hiring employer may have to consider in an attempt to avoid, minimize, and/or mitigate the risk of litigation for hiring from a competitor.

Hiring from Competitors – Seeking Full Disclosure from Candidates

Every hiring employer must make deliberate efforts to understand the potential legal obligations a potential candidate may have to their former employer as a way of avoiding and understanding the full scope of the risk of litigations that arise from a breach of restrictive covenants. Accordingly, the hiring employer should seek full disclosure from a potential candidate, including copies of any employment policies, incentive or stock compensation covenants, contracts, or other documents in which possible restrictive agreements on post-employment activities are contained.

On the one end, candidates must understand that they could lose the chance of being assisted by the hiring employers in defending claims arising from undisclosed covenants or, worse, suffer adverse consequences, such as termination of employment following their failure to provide full disclosure. They must also understand that providing full disclosure of existing post-employment restrictions would enable the hiring employer to amicably evaluate and determine (1) the likelihood of prevailing in the event of litigation, (2) whether the hiring is worth the risk, (3) what the potential risks of litigation will be, and (4) the extent of reach and scope of the covenants.

On the other end, it is critical for hiring employers to have up-to-date information regarding how restrictive covenants are being enforced through the most recent legal developments of both state and federal laws. Such information would provide a clear picture and full closure of a potential candidate’s legal obligation(s) to their former employer. Recently, many jurisdictions have considered substantially restricting or entirely prohibiting the use of non-competing agreements, which points to a perpetual flux in the domain of restrictive covenant law.

For instance, while they have continued to investigate employers who, without a clearly demonstrated business need, use non-compete covenants and other restrictions, the attorneys general from Illinois and New York have been very aggressive in prohibiting employers from using agreements not to compete against lower-level workers. In fact, the enforcement of agreements not to compete against low-wage workers was recently banned in Illinois following the enactment of the Freedom to Work Act. Notably, other states, including Washington, Virginia, Rhode Island, Oregon, New Hampshire, Nevada, Massachusetts, Maryland, and Maine, have also passed statutes and Acts that prohibit the use of non-compete agreements based on income. Over time, the trend toward the limitation of the scope and spread and prohibition of non-competes is expected to expand exponentially.

In Part XI of this series and our blog titled “Hiring from Competitors – Screening & Interviewing Candidates,” we will hammer on the importance of screening and interviewing employment candidates thoroughly as another crucial step a hiring employer should take to avoid, minimize, and/or mitigate the risk of litigation for hiring from a competitor.

In the meantime, stay tuned for more legal guidance, training, and education in other series in progress. In the interim, if there are any questions or comments, please let us know at the Contact Us page!

Always rising above the bar,

Isaac T.,

Legal Writer & Author.