A Checklist for Hiring a Competitor’s Employees

Coca Cola hires Pepsi’s top-notch public relations manager. Dunkin’ Donuts snags Starbucks’s chief financial officer. Yahoo steals away Google’s vice president for search products.

Fictional or not, doesn’t it sound kind of fun to consider hiring the star employee of your competitor? The mere suggestion of poaching a rival’s talent pool is both thrilling and scary. Thrilling because there is a great potential to boost business. Scary because if you approach a competitor’s employee the wrong way, you could find yourself embroiled in expensive litigation that keeps you occupied for years.

If you want to hire a competitor’s employees, here’s a quick checklist.

If you are a Virginia business that wants to hire a competitor’s employees, you need to start with good legal advice.

Start by calling a lawyer. Yes, sometimes legal advice doesn’t make sense. It’s counter-intuitive. It’s complicated. The following advice is without explanation. It is simply a things to-do list. You really should get a lawyer before you hire from a competitor. Not after – by then, it’s too late. Be proactive.

So here is the list of things to consider before hiring away your competitor’s top performer:

  1. Get a Lawyer – Hire an employment lawyer in the state where the other employee works to advise you. The state where you work doesn’t matter and the law doesn’t likely apply. See, I told you to hire a lawyer.
  2. Don’t Write it Down – Until you are ready, do not put anything in writing. Don’t email the employee – text to send a note. Call. Better yet, meet in person.
  3. No Secret Stealing – Tell them you have no desire to obtain the secret information of the other company. Say it and mean it. If you take that secret info you have violated the Virginia Trade Secret Act and likely opened yourself up to a big expensive gross lawsuit.
  4. Define Roles – Find out the role of the employee now – and decide whether you want that role to be the same.
  5. Review Contracts – Find out of they have an employment contract. If you, read it. Have your lawyer read it. If no contract, dig further. Is it possible they forgot?
  6. Price the Risk – Decide right now if this employee is worth the $50,000 you may have to pay in litigation expenses. Many times, a strategic acquisition justifies a remote risk of litigation, but you need to price the risk now. 
  7. Tell No One – Do not tell clients or employees about your plans until everything is finalized. 
  8. Keep it Positive – Tell the potential employee you have no intent to harm their current company. None. You wish them all the best. You don’t want to steal clients or customers. You just want to hire a great person! (Even if you don’t mean any of this – say it).
  9. Consider Costs – Decide right now if you are willing to pay the employee’ attorneys fees. This is often a deal breaker if you are not and it is better to calculate this with the offer.
  10. Do Your Homework – Investigate whether the other company has sued employees in the past. If so, were they successful? Again, this is where a lawyer comes in.
  11. Talk it Over – Discuss with all the decision makers.
  12. Plan the Transition – Tell the employee you don’t want them to access any work information, email etc. after hours or forward any email to them. If they do – deals off.

Do all of the above, and you can make a good decision as to whether to hire from a competitor. Good companies get legal advice and plan for risk – and great companies attract great employees.

Lauren Ellerman

Lauren Ellerman

In 2011, Lauren Ellerman was named "Young Lawyer of the Year" by the Roanoke Bar Association for her work in the community. To speak with Lauren about your personal injury case, contact her at lellerman@frithlawfirm.com.