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How to Avoid Business Litigation When Hiring Employees from Competitors


While agreements between companies not to hire each others’ employees are increasingly receiving more and more scrutiny, companies also have to be careful about hiring employees from a company that then turns around and accuses it of stealing customer or trade secrets. In sum, avoiding business litigation when it comes to employees moving from one company to another involves walking a very fine line and juggling a number of precautions in minimizing risk of litigation from other companies, mostly via your company’s hiring procedure.

While this seems like it might be straightforward, in reality, the “blurring of the lines” between personal and professional is where things can get complicated. This is especially the case when it comes to electronic devices and other workplace technologies which—if not handled with care—can lead to the discovery of documents that belong with a former employer. Still, there are three overall steps that can be taken by in-house or outside counsel that can help a company minimize risk when it comes to this issue, as we discuss below:

Precautions to Protect Previous Employer

In a nutshell, as the new employer, you should take precautions to protect the business interests of the former employer when it comes to your employment agreement. This means actively taking steps to ensure that any confidential information and/or trade secrets are protected and not used in their new position. This includes making it clear that there are consequences that can ensue, should the employee violate this (via termination, suspension, etc.), as well as reviewing the employee’s previous employment agreement with the previous employer as an initial step.

Be Diligent Regarding What Is Brought With the New Employee

The new employer should also prohibit the employee from bringing in any documents whatsoever that could be construed as confidential information and trade secrets, such as business strategies, customer lists, marketing information, and anything else that could be considered proprietary information of the previous employer. All of this must be returned to the previous employer before the employee transitions to their new job.

While this may sound easy and straightforward, in reality, it can be more difficult in the modern (digital) world that we live in, where employer documents often inadvertently make their way onto personal devices, particularly for folks who sometimes work from home. To ensure that you are covered, make sure that part of the hiring and transition process involves the new employee double-checking these personal devices and any other storage locations at home to make sure they have not inadvertently made off with the previous employer’s proprietary information.

Consult With the Right Florida Business Litigation Attorney

When businesses fail to invest time and effort into the right precautionary measures, sometimes they are left with no choice but to engage in expensive litigation. Ensure that you work with one of our experienced Florida business litigation attorneys today to ensure that you are covered in every step that you take in the hiring process. Contact the Sarasota office of Suncoast Civil Law to find out more.