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Can I Legally Keep My Competitors From Recruiting My Employees?

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Question: Is there a tangible way for a contractor to protect himself from having his staff of trained technicians from being raided by another contractor? Are ‘non-solicitation’ agreements” actionable? Can ACCA chapters agree that they will not actively recruit from each other? Can other dealer groups take similar actions so that when joint training is held, an unwanted by-product of head hunting is reduced or eliminated?

Answer: Non-solicitation agreements are governed by state law. Some states outright prohibit them (California, which also prohibits non-competes), while others have varying forms of what they will and will not tolerate. Some states consider an attempt by an employer to do so as tortious interference with business, which is most certainly actionable, and will open the employer to liability. Agreements among a group of competitors (e.g. state and local associations with memberships of competing businesses) limiting their ability to compete for employees raises antitrust concerns, even though the end result of such a restriction might not necessarily drive up prices among the competitors. For example, such an agreement could have the effect of maintaining the status quo within an industry, deterring competition and preventing companies from hiring more experienced employees.

Still, there are times when the attempt to hire away an individual who works for another company might be held to constitute tortious interference with contract or business expectancy and other state tort claims. Thus, it would not be unreasonable for an association to prohibit members from taking any illegal actions in their solicitation or hiring practices. An organization may include and enforce such a provision as part of its code of ethics, for instance, so long as the prohibited conduct is limited to the illegal solicitation or hiring of employees.

You can, of course, limit a training session to just that – training. Any unwanted marketing, solicitation, etc. can be prohibited from the class/session itself. However, outside of the confines of the class is another matter altogether, and you cannot and should not attempt to control sidebar conversations.

Frankly, the best defense to keeping your employees is to keep them happy and paid commensurate to their abilities. No piece of paper can protect you from another potential employer who has and can offer them better pay, benefits and work environment.

This response is intended for general informational purposes only and should not be construed as legal advice or a legal opinion, nor is this column a substitute for formal legal assistance. 

Hilary Atkins

Posted In: Legal

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