When a candidate violates a signed agreement to take a new job, it’s not always just the employee who ends up in court.
In one recent case, a company was sued by a competitor after it hired a former employee. The employee violated an agreement he signed with his original employer by contacting its customers to switch them over to the new company.
The company sued both the employee and the company. The man lost his case, but the company wasn’t held responsible.
When the employee was hired, the company asked him if he was under any restrictions, and he lied and said no. The court ruled that a company can be held liable only if it “knows or should have known” an agreement is being broken. In this case, the company had no way of knowing.
What can HR do?
When hiring people from a competitor, employers can avoid legal trouble by asking the employees if they’re under any employment restrictions. You can also have them sign a statement saying they won’t violate any agreements by working for your company.
Cite: Infinity Products, Inc., v. Quandt
