9

Edit:
This is not a question seeking "legal" advice. I don't have a single mention of courts, law, suing or lawyers in my question, besides this edit, which is in response to the question being closed down. This question is about corporate contract clauses and if companies go far to enforce those clauses. I have read and re-read the linked post about "what's a legal question" and my question falls right within the "OK" category.

Here is a situation a friend of mine, let's say Todd (who is remaining anonymous for obvious reasons) is in.

Todd was working at Company A. Todd signed a standard contract with all the "non-compete" and "no soliciting of clients, personnel, etc" clauses (never fully reading them).

Todd is now working at Company B. When a new position opened up, he invited a friend, let's say Joe (thanks user16230) from Company A (fully employed by Company A at the time) to come join Company B. That friend now accepted a position at Company B, and upon leaving Company A told his manager that it was Todd who contacted and invited him to leave for Company B (yes... someone needs a smack on the back of his head). The concern now is that Company A can go after Todd for poaching personnel.

Is there any real reason, in Canada, for concern here? We've been trying to do some online research, but all of it covers "non-solicitation" in regards to poaching clients, not personnel. We can't even find the correct terms to use for researching this.

We've read that "non-compete" clauses are void in virtually all cases. But what about "non-solicit of personnel"?

Edit: Some more clarifications following questions in comments:

  • Both companies are small businesses.
  • Todd is not a hiring manager in any capacity
  • Todd sent job description to Joe, and Joe forwarded resume to Todd, but that was done through web email providers, not company email addresses.
  • 5
    Unless Todd was the hiring manager who made the offer, he didn't do any soliciting. He simply made mention of an open position at his company to a former co-worker and friend, who then on his own, approached the company and applied for the position. – Roger Mar 25 '14 at 14:57
  • 1
    This is right in line with asking for legal advice, which isn't within the scope of our forum - we might be able to talk ethics, or strategy, but talking about whether or Todd can be sued for this is in the realm where you need to get a professional consult. – bethlakshmi Mar 25 '14 at 15:53
  • 1
    @jmac lawyer is a given, if it comes to that. Thanks. – user17859 Mar 28 '14 at 14:46
  • 1
    Thank you for taking your time, reading the mentioned post. Unfortunately it's not comprehensive. I agree with Chad, this is a question that needs an answer from a lawyer. The part whether your actions are covered by these terms your lawyer should be able to answer. The part about whether they would enforce what's in the contract, their lawyer certainly will know the answer to. – CMW Mar 28 '14 at 18:35
  • 1
    I am not a lawyer, and this is strictly from personal experience: but in Canada it is much harder to enforce non-compete clauses than in the US. These clauses still get written into the contracts, but unless there is confidential information or specific client relations, it tends to go nowhere. I base this on a conversation I had with a person that had to deal with a poaching situation. – MrFox Mar 28 '14 at 19:43
5

I cant speak much to Canada but I will speak to the US and I would think its safe to say the rules are somewhat similar as is the wording in the contracts.

Many companies here in the US have similar contracts (I myself am under one). The real problem is that these matter are always very very grey and tend to have little ground with which to base a case on. Lets say todd was out to dinner with joe (the guy that moved companies) and simply said in conversation "We have some positions opening up very similar to what you do". Lets say, joe on his own accord then goes to Company B's website, finds the job listing, applies, gets the job, and quits Company A the next day. Did Todd poach him, no, Todd made him aware of a situation and he took advantage of it.

The other issue here is the burden of proof, at least here in the US you would have to prove that Todd poached him. For that you may need emails, texts or some kind of written prof that Todd made an effort to pull Joe from A to B. This can be tough especially if a good deal of the recruiting happened through word of mouth.

The biggest thing here is that, at least here in the US, this happens all the time and its often hard for small companies to sue giants for doing it. Lets say you left a small software startup to go work for Apple, you then called one of your buddies that was still at the startup and brought him to Apple. The fact of the matter is the startup is not going to sink valuable money into suing Apple, contract breach or not, unless they know its a sure win. On the same note that also says a lot about Company A as they clearly were not offering the opportunity that Todd and Joe were looking for. I would think your friend has little to worry about.

  • Nice answer. Unfortunately, both companies are small, and there was email exchange (not through company emails though) – user17859 Mar 26 '14 at 14:21
  • 1
    In the US, as far as I know I believe you need a warrant to get that kind of information. That being said I dont know Hotmails terms of service so the info may be able to be purchased. This is very much the case where you should inform a lawyer of what happened and be prepared. However I maintain the feeling that nothing will really come of it. If they are small companies they most likely dont have the time or want to deal with all the legal recourse of this. Only time will tell in this case. – Dave Mar 26 '14 at 15:23
4

First Todd needs to stop signing things without paying attention to what they say. Then he needs to follow what he has contractually agreed to. This will keep him out of trouble in the future.

Next. Todd couldy be in trouble if Company A chooses to pursue it whether they have a good legal case or not. (And vindictive copmaines often will) It is likely the corporation can afford better representation than Todd can. He will likely need a lawyer and time to deal with the suit. At the very least, he needs to find a good labor lawyer if he receives any official documents on this at all from Company A

Further Company B may get angry if they are sued for this and let both Todd and his friend go as part of a settlement to avoid a court case even one they might be likely to win.

All this depends of course on Company A and whether they choose to pursue this further. In my experience though, the companies that take the time to put this in their hiring documents tend to at least try to enforce them knowing many people will settle up rather than go to court and risk losing big. After all part of it is that trying to enforce it when violated will probably prevent some of their current employees from doing so because they know they will be facing a simlar action if they do.

My advice at this point would be for Todd to seek out recommendations for a local labor lawyer in case he needs to lawyer up. And for Todd to be much more wary of doing such things in the future.

  • @slav, no he would not be unemployed, he would be employed in a different sector. I have followed everyone of my non-competes to the letter and have not been unemployed as a result. – HLGEM Mar 26 '14 at 14:32
  • if Todd would have "followed what he has contractually agreed to", Todd would be unemployed for a year now, since the contract states "no working for competition in the same field/industry". This clause has been proven void by many court cases, as it violates on Todd's ability to work in his career. – user17859 Mar 26 '14 at 17:21
  • I am sorry, but that only works when you are a general laborer, or your transferrable skills are abstract to the company's field of work (such as an Accountant, Project Manager, HR, etc). You can be an accountant for a food manufacturer, and then be an accountant for a book publisher (non-competing businesses). But if you are a carpenter, or any other trade specific specialist, most other companies that employ carpenters would be directly or indirectly in competition with the previous one. Courts recognize this – user17859 Mar 26 '14 at 17:34

Not the answer you're looking for? Browse other questions tagged or ask your own question.