Thursday, Oct 01 2015

Make Hiring from a Competitor Less Risky

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Make Hiring from a Competitor Less Risky

Information technology is a competitive business. Companies compete for funding, for sales, and for employees. Because top tech talent is in short supply, sometimes the best hire is working for your competition. If you do steal someone away, make sure your theft is legal.

Take the Employee's Talent, Not Their Employer's Trade Secrets

You should be aiming to gain competitive advantage from the employee's special skills and knowledge, not from their inside information about their former employer's business plans. Trade secrets are protected by law, even if the employee hasn't signed a nondisclosure agreement.

It's important to make sure any ideas the employee brings with them are original and can't be claimed by their current employer. Some employment contracts give ownership of ideas, even if they were developed on personal time or seem unrelated to the company's line of business.

Make Sure the Employee Can Work For You

Some employees are under noncompete agreements with their employer. While courts don't always uphold these agreements if they're challenged, you should consider the consequences of a potential fight before hiring the employee.  Litigation can be expensive, even if you win. Court battles require time as well as money, so the employee's contributions may be limited until the case is settled.

Ask about any other agreements the employee signed. In addition to non compete agreements, nondisclosure, nonsolicitation, confidentiality, and other clauses may affect the ability of the employee to perform the services you want.

Make a Clean Break

Under some circumstances, it may be possible to work with the current employer to ensure that the employee doesn't bring over any materials. The current employer can designate a monitor to document that only personal items are removed from the premises and that all required corporate material was returned. This can eliminate the basis for claims of trade secret thefts later. If possible, you can structure the new employee's responsibilities to reduce the possibility of disclosing confidential information.

Consult Your Attorney

The best way to make sure your hiring the competitor's employee is within the law is to consult an attorney prior to offering a position to them. Make sure you and your legal advisor review all employment agreements signed by the employee with their current employer. Once you understand the commitments they've made, you'll be able to determine whether there are any risks in hiring them and if those risks are worth taking.