While employers may take measures and enact policies aimed to curb employee raiding, they should also understand that hiring from a competitor is not always “employee raiding.” Nonetheless, it is critical to take necessary precautions before making such a move. In this regard, we aim to provide you, through this practice and training note, with key tips and best practices that should be taken to minimize the risk of litigation when an employer decides to hire an employee who has been working for a competitor.
Minimizing Litigation Risks when Hiring from Competitors – An Introduction
Statistics available in the public domain indicate that there has been an exponential growth in litigations involving a variety of post-employment restrictive covenants, including non-compete agreements and trade secrets, for over three decades. In fact, a good number of these litigations have targeted even the new employer of a former/departing employee. While hiring from a competitor does not always amount to “employee raiding,” as discussed in the blog post “Preventing Employee Raiding to Protect Trade Secrets,” hiring a competitor’s former employee has proved to be a time-consuming and costly affair for many unsuspecting employers.
For this reason, employers are responsible for taking the necessary steps and considering a myriad of factors in an attempt to minimize the risk of litigations and be properly set to defend any legal action that might be brought against them for hiring from their competitors. However, it is also critical to understand that when hiring from competitors, it is impossible to eliminate litigation risks entirely.
With a primary focus on the key steps to be taken and factors to be considered towards minimizing litigation risks for hiring from competitors, this will be, as usual, a multi-part series. Accordingly, in Part II of this new series and our blog post titled “Hiring from Competitors – Leave the Hiring Employer an Out,” we shall start by hammering on one of the steps to be taken to minimize and mitigate the risk of litigation.
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, & Publisher.