News

Should We Hire That Rival’s Employee

A recent article titled “Do’s and Don’ts of Poaching Workers” in Investor’s Business Daily gave guidelines to consider before hiring a rival firm’s employees.  The practice of hiring employees from rival firms has a long tradition, but increasingly in our lawsuit-happy environment, firm’s must consider whether that person(s) had access to the “secret sauce formula, customer list, programming algorithm, or any proprietary or confidential information” of the rival firm.  If the person has that information and joins your firm, lawsuits could follow that hiring, especially if the person was under contract at the rival firm or had signed a “non-compete agreement.”  The article says to help safeguard the firm from this potential problem, a “well written employee handbook” addressing the issue is necessary.  The article talks about Hewlett-Packard (HP) recently hiring an IBM general manager, and IBM suing HP over the hiring, and in that case lost, but this type of legal action is becoming more commonplace.

According to Wayne Perrett, human resource manager for ComAp in Roscoe, Illinois, “a company does not want to become known as one that “steals” employees from competitors; that is bad for ethics and bad for business.”  Thus, it is not illegal to interview and hire employees from rival firms, and it has been done for centuries, but increasingly this is becoming a strategic issue to be managed, to avoid litigation.

Source:  Based on:  Sheila Riley, “The Do’s and Don’ts of Poaching Workers,” Investor’s Business Daily, March 31, 2014, A10.

Comments are closed