In today’s competitive business environment, employers are always looking for experienced and qualified employees. It is not unusual that such an employee works for a competitor who has invested both time and money in training the employee. The competitor’s employee may also have access to and use confidential information or trade secrets of the competitor. Hiring the competitor’s employee may result in the violation of the confidentiality or non-competition provisions of an employment agreement, violation of the Illinois Trade Secrets Act, or a breach of the employee’s fiduciary duty of loyalty to his/her former employer. There are several steps an employer can take to avoid possible litigation arising from hiring a competitor’s employee:
· Ask the prospective employee if he/she has signed any agreements with his/her employer. If he/she has, ask for a copy of any such agreements and review them to determine if they contain confidentiality or non-competition provisions.
· Ask the prospective employee if his/her employer had an employee handbook and whether the handbook contains provisions regarding confidential information. If the handbook contains such provisions, ask for a copy.
· Ask the prospective employee if any information provided by his/her employer is treated in a confidential manner; i.e., subject to limited disclosure or use by persons outside the company. Be sure to advise the prospective employee that when responding to this enquiry that he/she should not disclose any information that is to be treated in such a manner. The prospective employee should only advise you that such information exists.
· Do not request or accept product, financial, or customer information from a prospective employee which you know or suspect is not generally known to persons working within the industry.
· Do not request or encourage the prospective employee to solicit his/her colleagues to seek employment with your company. If you are interested in the prospective employee’s colleagues, recruit them yourself.
By following the steps set forth above, an employer should be able to determine whether the hiring of a competitor’s employee could lead to litigation and then take the steps necessary to protect itself from the claims arising from such a hire. In the event litigation does arise and appropriate steps have been taken to ensure that no contractual, statutory or fiduciary duties have been violated, an employer should be able to successfully defend itself in such an action.
If you have a question about the hiring of a competitor’s employee or how to protect yourself when a competitor hires your employee, please telephone a member of the firm.