Competition among rival businesses is hardly anything new, but there are some tactics that simply aren’t in the realm of legal practice. Competitors may vie for the same superstar salesperson, or they might bid for similar investors, clients, or partners, but some competitive tactics aren’t supportable, and they can result in serious repercussions. Employee poaching, or employee raiding, is one such example.
Employee poaching occurs when one competitor hires multiple employees from a competitor’s company. Assuming the company acquired these new workers intentionally, the term is called “poaching,” or “employee raiding.” Although employee poaching isn’t illegal as a direct offense, there are several ways in which the practice is considered unlawful. As a result, individuals or companies found guilty of employee raiding may face legal consequences.
What Is Employee Poaching?
If a competing company wishes to strengthen their team, they might attempt to do so by stealing away employees from other companies. Or, if an employee moves to a competing company, they may attempt to move their team over with them, creating a mass exodus that can be detrimental to the company losing employees. This process, employee poaching, isn’t outright illegal, but it is frowned upon and, more importantly, it can violate certain business laws.
Is Employee Poaching Illegal?
Employee poaching isn’t outright illegal in the state of Texas, but it often violates employment contracts, such as non-compete and non-solicitation agreements. A non-compete agreement can include provisions that include scope of activity, location, and rival company employment, among other things. If, however, an employee broke their agreement while moving to a new place of employment, they could face legal ramifications from their previous employer such as injunctions and damages.
Non-solicitation agreements, on the other hand, can prevent employees from working for competitors or bringing clients or other employees with them if they leave their current employer. Essentially, this type of employment contract prevents employees from using their current job position to help them in future business prospects. Employee poaching, by nature, can directly violate a non-solicit provision.
A breach of an employment contract is a common enough offense, but it is no less significant or damaging for its regularity. The consequences can include expensive legal fees, business-related restrictions, and other legal consequences, depending on the severity of the violation.
Additionally, employee poaching could be considered unlawful if it is related to the misappropriation of confidential information, theft of trade secrets, unfair competition, or breach of duty of loyalty. In any of these cases, the wronged employer may attempt to sue the employee or the competing business for wrongdoing.
Discover Your Options if a Competitor Is Poaching Your Employees
While employee raiding isn’t illegal in and of itself, the offense is often associated with other illegal business practices, such as violation of non-compete agreements, misappropriation, and theft of trade secrets. If you were involved in an employment law issue where you were the victim of employee poaching, or if you were accused of poaching, our firm is here to help. We can assess your situation and propose a viable legal plan to protect your short- and long-term interests.
We value our relationships with our clients, and we know the type of stress and confusion that comes hand in hand with cases like this. However difficult your case may seem, our team can use our ample resources to create a strong case on your behalf.
Contact Hendershot Cowart P.C. to schedule a consultation with our firm today.