Due to the use of online marketing, business competition is fiercer than ever. This hyper-competitive environment causes many business owners to wonder how they can stop the poaching of their good employees. First and foremost, 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.
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 agrees 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.
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 Gratia P. Schoemakers, Creative Business Lawyer®. We offer a complete spectrum of legal services for businesses and can help you structure your operations for success. One of our primary services is a LIFT Start-Up Session,™ in which we guide you through the right choice of business entity, location of business entity, start up agreements, intellectual property protection, employment structuring, insurance, financial and tax systems you need to start your next business and succeed right out of the gate. Call us today to schedule a time to have a conversation!