Poaching Employees

Poaching Employees

How to avoid getting into legal hot water...

By Marcia Smith

Is poaching legal?

There are no laws to stop you from poaching employees from a competitor. If you want to headhunt someone, and you’re prepared to make them an attractive and competitive offer, there’s usually nothing to stop you.

The only cases in which employee poaching could result in legal action is if it breaches a contractual agreement made by either you or the employee. Some firms place restrictive covenants on employees in an attempt to prevent them from working for a similar employer in the same market, setting up a rival business, or poaching customers, staff or suppliers when they leave. Such restrictions can apply only for a limited amount of time, and could be challenged in court.

Preventing employees being poached

There are two key approaches to prevent employees from being poached by a rival firm:

1. The legal approach involves placing restrictive covenants on your employees. These can prevent an employee from working for a competitor or poaching clients when they leave. The downside is that you would need to take legal action to enforce these rules, they could be open to legal challenge, and they risk antagonizing your workforce. Generally, while restrictive covenants can act as a deterrent, they are difficult and costly to prove in reality.

2. The alternative approach is to take positive steps to encourage employee loyalty, by offering job security, perks and an enjoyable working environment. Whilst providing no legal guarantees, this approach can actually be more successful, and is also likely to improve your employees’ productivity.