In attempts to protect their confidential information and/or trade secrets, competitors agree that they will not poach each other’s employees by signing and entering into “no-poaching” or “no-poach” covenants known as “no-hire agreements.” However, pursuant to 15 USC § 1, employers (competitors) should be aware that such “no-poaching” or “no-poach” agreements may or may not be enforceable as restraints under the Sherman Act.
As a conclusion of this discussion and series altogether, this key note sheds light on how employers should approach and combat incidents of employee raiding once they occur.
Dealing with Employee Raiding Once It Happens
Employers should always be on the lookout because employee raiding can occur at any time despite having implemented the policies and measures discussed in Part XVII of the series and our blog post “Preventing Employee Raiding to Protect Trade Secrets.” Every employer is responsible for seeking an expedited forensic investigation of employees’ electronic devices upon learning that a competitor has raided, could be raiding, or is attempting to raid its business for employees. Through the policy that they reserve the right of accessing, inspecting, copying, and confiscating any type of communications (including text messages and voicemails) on devices supported by or connected to the employer’s IT infrastructure, the employer may obtain valuable data concerning how the plan for employee raiding was implemented and who was involved in coordinating the business raid.
After reviewing the devices, the employer should, through its legal counsel, send desist and cease notifications to the departing employees, reminding them that they are still subject to common and contractual law obligations not to disclose, compete, or solicit, and competitors informing them of their moral and ethical obligation not to raid businesses seeking confidential information from employees.
Unfortunately, while an employer may have an actionable claim, a cause of action for employee raiding is not recognized in most states. Instead, most states recognize claims against competitors for employee raiding in the form of tortious interference, misappropriation/theft of confidential information and trade secrets, and/or unfair competition causes of action. This implies that employee-raiding claims should be brought whenever there is reasonable evidence that a competitor gained access to their trade secrets and/or confidential information by intentionally raiding a rival employer and inducing key employees to resign from their jobs.
With that, we have concluded our nineteen-part series on Enforcement of the Protection of Employers’ Confidential Information & Trade Secrets. We are confident that, based on the content we have provided since Part I, you, as an employer, employee, or reader, is more enlightened, educated, and trained on matters regarding how to enforce the protection of trade secrets and other confidential information.
We still have a bunch of other ongoing series and others to come. As usual, stay tuned for these and benefit from more education, training, and legal guidance. In the interim, reach out to us with questions and/or comments on our website at the Contact Us page!
Always rising above the bar,
Isaac T.,
Legal Writer, Author, & Publisher.