Poaching employees | Can competitors steal your staff?
There’s something about January that makes many of us crave a change of pace. And this year, the desire for a fresh start – possibly in the form of switching up your job situation – is likely to be stronger than ever, as we try and move on from the stresses of 2020.
While the UK’s economic situation and rising redundancy rate may make employers feel less concerned about shedding staff in 2021, the truth is that in some sectors, the rise of homeworking has given employees more options than ever before.
So what, if anything, can be done to prevent your best employees from being poached at a time when you need them most? How much say do you have over your staff’s next move? Our Employment Law experts explain.
First, what is 'poaching'?
Poaching is when an employer actively approaches, or ‘head hunts’, someone who is already employed by, or working at, another organisation, as opposed to advertising a vacancy and going through a usual recruitment process.
The targets of poaching are usually employees of direct competitors or former employers, as these individuals can bring with them industry knowledge, an understanding of your client base, and valuable insight into the practices of rival businesses. This often equates to less training and a competitive advantage, which can be temptation enough to poach.
Is it illegal to poach someone else's staff?
While there is no law that directly prevents organisations from stealing each other’s staff, it’s possible that legal issues could arise if, say, the hiring manager has signed a contract with a previous employer that contains a non-poaching clause. In that scenario, coaxing ex-colleagues to take up a role with the new employer – within a given time period – may constitute a breach of contract, which may result in legal action against the employee who lured them away, or the new employer.
Of course, legalities aside, there’s also the question of whether poaching is an ethical hiring practice and whether you may be burning bridges that might cost you in future, or perhaps breaking an unspoken agreement between you and your competitors, thereby giving them ammunition to do the same.
Is there anything we can do, contractually, to prevent staff from being poached?
You may wish to incorporate a ‘restrictive covenant’ into your contracts. These clauses are normally reserved for more senior-level positions and are designed to protect organisations from staff going to work for a competitor, setting up a competing business and/or taking clients with them.
Restrictive covenants can only be utilised with employees – not workers or self-employed people – and would need to be agreed with the employee (either by including it within their contract from the outset or by adding it in later, for example, if such a clause becomes necessary following a role change or promotion).
Note also that restrictive covenants cannot be imposed indefinitely; they usually apply for around six months and within a specified geographical location, for example a half-mile radius of the employee’s place of employment. Indeed, case law around restrictive covenants has emphasised that they should be used reasonably and only to the extent necessary to protect your business interests.
What rights do employers have in relation to staff leaving to go to a competitor?
This will depend on the terms of the Contract of Employment in place. If this contains a restrictive covenant, and the employee breaches any of the restrictions once their employment with you has ended, you would have grounds to take legal action. This could include court proceedings to seek an injunction and/or claim damages.
What if the person is self-employed? Do we have any say over what they do once they leave us?
For self-employed individuals, such as hairdressers who rent a chair within your salon, your ability to enforce any restrictions post-employment will depend on the commercial agreement in place. This might, for example, prevent them from poaching your business’ clients for a period of time.
However, keep in mind that imposing such terms for self-employed people may raise questions about their employment status. Don’t forget, if an individual acts like an employee and is treated as such, they will usually be one even if they are described as self-employed, potentially affording them more rights.
Ultimately, if employees are determined to leave, then they will. Restrictive covenants may provide some protection and peace of mind, and act as a deterrent against impulsive New Year role changes, but they are not a lifetime guarantee or a way to monopolise the best talent.
When it comes to improving staff stickiness in 2021, finding ways to improve job satisfaction – through respect, fair treatment, flexibility, progression prospects and investing in wellbeing – is likely to prove far more fruitful than spending time trying to block employees’ means of escape. As the saying goes, ‘Train people well enough so they can leave, treat them well enough so they don’t want to.’
Need advice on this topic?
In a similar scenario, or want to pre-emptively strengthen your position? Our Employment Law specialists can offer expert advice on your legal rights and the best course of action, as well as review and revitalise your contracts to make sure they offer maximum protection and flexibility for your organisation.
Find out more about our Employment Law and HR support or call 0345 226 8393 to discuss your situation with one of our friendly team.
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