How to Hire a Competitor's Employees

posted by Neil Klingshirn  |  Jan 25, 2010 2:32 PM [EST]  |  applies to Ohio

Suppose an employee from a competitor applied for an open position with your firm. She did not take any trade secrets from the competitor and will not solicit her the competitor's customers.  However, she signed a covenant not to compete that prevents her from accepting employment with your firm.  If she is willing to defend claim for violating her non-competition agreement, can you hire her?

In Ohio and other states that recognize the "fair competition" defense to tortious interference claims, the answer is "possibly."  If the employee was "at-will" and
  • you do not employ wrongful means to procure the breach,
  • your action does not create or continue an unlawful restraint of trade, and
  • your purpose is, at least in part, to advance your interest in competing with the other employer,

then you may have the defense of fair competition.  Importantly, the defense of fair competition is only available to the competitor (and not the employee, who will have to defend the contract breach claim) and, again, applies only to agreements that are terminable at-will.

To learn more about legal risks and defenses related to hiring a competitor's employees, check out MEL's FAQs about Hiring a Competitor's Employees.

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