Am I poaching staff?
We recently sold a part of our business to a competitor. The contract stipulates we cannot poach any staff from them for two years. However, three of our old staff have now handed in their notice to their new employer. I have been contacted by these former employees who want to come back to work for my business. As they have left anyway and want to work for me, I would like to take them back. Will this create a legal problem? Do I have to compensate the other company? And if so, how much?
A. Derek Kemp of Liquid HR writes:
Firstly, you must look at the exact wording of the term in the contract which stipulates you cannot poach. From what you have described, you are clearly not poaching, as the three staff have resigned and approached you of their own accord.
There’s also the time that has elapsed since the sale of the part of the business to consider. I note there’s a two-year period contained in the contract, during which your ability to poach (and possibly re-employ) is limited. The longer it is since the sale took place, the less likely you are to face a successful claim for damages should you go ahead and re-employ the three staff.
You also need to look at the skills, knowledge and experience of your former employees and the corresponding implications for the company they are leaving. If the staff are so critical to the business that without them it may well not be viable, and by the same token, by re-employing them you are enhancing your own firm’s competitive edge, the chances of a successful claim for damages are that much greater
The question of how much it might cost you will depend upon the circumstances. If the relevant contractual provision stipulates that you cannot re-employ the staff, and if they are leaving soon after the sale, and with the skills and experience to harm your competitor, a successful claim might result in you having to paying a significant amount in damages
An alternative course would be for you to approach your competitor and seek to resolve the matter informally. Bearing in mind the staff have resigned, and if they don’t present a major loss for your competitor, it may be possible to arrive at a mutually beneficial agreement at a modest cost.