Employee Poaching (CONT’D FROM PAGE 32)
Employers should also avoid tarnishing the picture by spreading false and damaging information about the em- ployee’s current company. “If an employer falsely tells a coveted person that his current employer is going out of business, that is ‘trade libel,’ a special form of ‘libel and slander,’” says St. Antoine. Changing Laws Non-competes, non-solicits and confidentiality agree- ments form a three-legged stool of defense for employers looking to protect valuable business information. But re- strictive covenants must balance the needs of the employ- er with those of the employee. At the same time, employ- ers must periodically review such agreements to ensure they continue to comply with state laws that are becoming more protective of workers by imposing new restrictions on what employers can prevent them from doing. “The viability and enforceability of a company’s restric- tive covenants, particularly non-competes, are more likely
a verification or agreement the individual is not taking con- fidential information from somewhere else,” says Ahmad. “And also that that employee is not subject to a restric- tive covenant that they have not made the new employer aware of.” When determining the risk involved in poaching, em- ployers also need to examine their conscience: If the goal is not to attract a skilled employee but to cripple a compet- itor by grabbing trade secrets, hiring the individual can be actionable in court. “You may simply see a very talented person performing for another firm and you think you can give that individual a better deal,” says St. Antoine. “That won’t give rise to a cause of action. But you can be the target of litigation if you have some other element in the picture, such as an effort to get insider information.”
to be the subject of rigorous review today than in the past,” says Hwang. “To ensure enforceability when it counts, employers should review the scope and terms of such documents to ensure they are sufficiently and narrowly defined to meet their legiti- With so many employers trimming work forces in response to the Covid-19 pandem- ic, many terminated individuals will be tak- ing positions with competing firms. Employ- ers may be tempted to overlook the terms of restrictive covenants so their terminated workers can earn a living. Doing so, how- ever, may jeopardize the employer’s future profitability. “Employers who choose not to seek en- forcement of restrictive covenants during this time should understand that failure to do so may hinder later enforcement,” cau- tions Joon Hwang, Shareholder in the Ty- sons Corner, Va., office of Littler Mendelson, P.C., the nation’s largest law firm defending employers in labor and employment dis- putes ( littler.com ). He points out that future employees who breach restrictive cove- nants may assert a waiver argument—that the employer’s prior forbearance proves a lack of legitimate business interest to sup- port enforcement of the agreements. mate business interests.” Covid-19 Heightens Risk There is a solution to this conundrum. Hwang suggests employers take steps to minimize the risk their well-meaning inac- tion may have by memorializing their justifi- cation for not seeking to enforce the restric- tive covenants. Legitimate reasons might include:
CONTINUED ON PAGE 36
34 March 21, 2022
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