Don’t Cross This Line When Recruiting Turns Into Poaching

Among the potential pitfalls are violations of an employee’s work
agreement with his or her former employer and improper
solicitation of the employee’s former co-workers, experts say.

“It’s one thing to lose an employee to a competitor,” said Nicole
Belyna, manager, recruitment and recruitment strategy at
Thompson Creek Window Co. in Lanham, Maryland. “It’s another
thing when you lose an employee to a competitor and they bring
propriety information along with them — or they take the
manager, and they bring the whole team with them.”

Ms. Belyna, who also serves on the talent acquisition panel for the
Society for Human Resource Management in Alexandria, Virginia,
added that “doing your homework on the front end before you
even extend the offer is important.”

The insurance industry is no stranger to poaching lawsuits. In
March 2017, Lake Mary, Florida-based brokerage AssuredPartners
Inc. agreed to pay Brown & Brown Inc. $20 million after hiring
away eight workers in violation of their employment agreements.
AssuredPartners was also restricted from hiring anyone in its
Daytona Beach and Orlando, Florida, offices for 18 months, and
nationally for six months.

Also last year, a jury in California found that a group of 10 former
Aon P.L.C. brokers did not breach their fiduciary duty to the
brokerage when they left Aon to join rival Alliant Insurance
Services Inc.
in 2014 and were later followed by a team of more
than 60 other Aon employees.
Ken Sulzer, managing partner at Constangy, Brooks, Smith and
Prophete L.L.P. in Los Angeles, said employers are allowed to
hire workers from competing firms in a free market. However,
there are some conditions.

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“The question is, do you give false, misleading types of
information about the person’s company that you want them to
leave,” he said. “Did you do other things to sabotage the
relationship that would be illegal or unfair?”

Mr. Sulzer advised employers to review any agreements
prospective employees may have with their current employer.
Make certain they do not contact any of their friends at the
current company and warn them in writing to return any
documents from that company or let management know about
the situation, he said.

“The employee should not be soliciting and calling up employees
from the other firm,” he said.
“They should not be texting them, emailing them or calling them,
and they should certainly not be creating any record of
unexplainable contacts with employees at the old company,
because you’ll run into a potential solicitation issue.”

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“I think the word ‘poach’ has a negative connation,” said Dean
Harvey, a partner with Lieff Cabraser Heimann & Bernstein in San
Francisco. “But if you ask what is actually happening, it’s an
employer hiring an employee from a current employer
somewhere else, which is a good thing generally.”

Laws regarding noncompete agreements vary by state, Mr.
Harvey said.
“If a company has offices all over the country there can be many
different standards that apply to different offices, and you have to
be really careful about it,” he said. “There’s a balance there
between protecting the employer’s interest and protecting the
employee’s right of mobility. Usually that means there has to be a
time limit — it’s not perpetual. There’s usually a geographic limit.”

In 2010, several Silicon Valley companies, including Apple Inc.,
Google Inc. and Adobe Systems Inc., got into trouble with the
U.S. Department of Justice when they were accused of collusion
to refrain from recruiting each other's employees. The companies
settled with the government; Adobe, Apple, Google, and Intel
Corp. reached a $415 million settlement in a civil lawsuit.

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“There were serious allegations that a lot of those companies
agreed not to solicit and actually not to hire one another’s
employees,” said Steve Libowski, a partner with Dentons US
L.L.P. in Chicago. “Companies and HR professionals can’t agree to
leave other companies’ employees alone. That’s antithetical to free
markets.”
In October 2016, the department and the Federal Trade
Commission issued Antitrust Guidance for Human Resource
Professionals, a document intended to alert human resource
professionals and others involved in hiring about potential
violations of antitrust laws.

Employers who a looking to repel poaching attempts are advised
to pay attention to what’s going on around them.

“You have to wonder why somebody wants to go a
competitor,” Ms. Belyna said. “Somebody goes to a competitor
because they’re not getting something where they are. So that’s
where employee engagement comes in.”
“My advice is that if you want to keep your employees, treat
them well,” Mr. Harvey said. “What a concept.”

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