Sometimes people complain how difficult it is to get a job in the current economy. However, what happens when someone has the type of skills needed and their employer’s competitors are approaching them for jobs?
That could be tricky given that certain employment contracts restrict their employees from going to work for their competitors.
Employee poaching is nothing new and happens all the time. The question is whether it is allowed in Canada?
What exactly is employee poaching?
It’s when a competitor of a company tries to entice a company’s employees to quit their current job and go work for them. Employee poaching is also known as employee raiding and often involves actively recruiting employees from competing businesses. This often occurs in high-growth industries that need employees who have specialized skills.
Is employee poaching legal?
In many circumstances employee poaching is lawful. Where a recruiter is only looking for the employee’s particular skills when recruiting that employee then there usually isn’t a problem.
However, a problem can arise when the person who is doing the recruiting is poaching employees from his or her former employer. If the former employee doing the recruiting is doing the poaching and if the person had a restrictive covenant agreement with his or her former employer then they could be in legal trouble.
A legal problem can also arise where the former employee was in a senior position and had a fiduciary obligation to their employer, because that employee was likely involved in high-level responsibilities that affected the directing of the business. If that former senior employee now poaches workers from their former employer, then the law comes in and says that the person who used to be a fiduciary cannot solicit their co-workers for a certain amount of time.
A bigger legal problem arises when the employee who has been poached with the intent to access valuable information, such as confidential information, trade secrets, client lists, and intellectual property. Both the new employer and the employee could be in trouble.
Can I be sued if I decided to accept a job with my employer’s competitor?
In general, a person can be sued if there was a non-solicitation and/or non-competition clause in their contract. However, the non-competition clause is not easily enforceable.
The courts in Canada see a clause that forbids a former employee from working in their field as not being in line with public policy, even where they go to work for a competitor. That is because restricting or prohibiting someone from working in their chosen field interferes with their liberty, their rights and restricts competition. Since Canada has a market-oriented system, which encourages competition, the court often sees restrictive competition clauses as problematic.
However, in situations where an employee had private information, client lists or other sensitive information belonging to the employer, the courts are a lot tougher on the former employee.
Finally, non-solicitation clauses are easier to enforce in Canada, if they are reasonable and only last a reasonable amount of time.
If your employer is suing you because you went to work for a competitor or you opened your own business you should consult a lawyer as soon as possible.
How enforceable are non-competition and non-solicitation agreements in employment contracts?
Employee poaching definition