As an employer how can I prevent my employee’s being poached by a rival employer?

Poaching by a rival employer

Often a rival employer will seek to poach the talent from another employer so as to maximize the potential profit which can be made by his company. In some cases this will be in relation to one high executive employee but in other circumstances it can result in whole teams being poached.

Problem since the economic downturn

Before the financial problems faced by the economic downturn businesses may have tried to compete against each other for potential client contracts simply by buying these contracts and outbidding their potential competitors. However, since the economic downturn and the various financial problems associated with this many businesses are resorting to cheaper and more underhand tactics to secure this business.

One way of doing this is by not only poaching one member of a rival employer’s team but poaching the whole team.

Client deals directly with a specific team

Often a specific client will be assigned to a specific team meaning that the client is used to dealing with the same people and if that team is making money will be extremely happy in dealing with those people. If this is to be the case the client will prefer dealing with that team rather than the company as a whole meaning that if the entire team was poached from one company it is likely that the client would go with the team rather than staying with the original company.

Are there any available legal remedies in order to stop this happening?

If an employee has adhered to the notice provisions contained within their standard employment contract then their resigning from the company will not have breached the contract and they are free to move to a competitor. This will be the case even if it is a whole team of employees leaving.

If an employee breaches the contract when leaving there could be a potential claim against the rival company in inducing that employee to breach their contract. This however would be difficult as it is likely that the employee will not breach their contract.

It has also been claimed that the rival company was poaching the employees to obtain valuable confidential information from that company. This again may be difficult to prove if there has been no breach of their original contract.

As an employer is there anything I can do to prevent this from happening?

The key things which an employer should do to minimise the risk of an entire team of employees jumping ship are as follows:

  • Structuring all employment contracts in a way that anticipates a team move – try and put provisions in this to prevent it happening

  • Ensure that your customers or clients are not just looked after by a small group of individuals – vary the individuals which a specific client deals with

  • Responding with a clear and concise strategy to a threatened team move

Employment Contracts

Most employers will use the same standard contract for all of their employees simply dealing with certain issues such as termination, working hours, place of work etc with the only variations being in relation to the pay of each employee.

In order to minimise the risk of a team of employees leaving it is good practice to tailor each specific contract to deal with the team dynamic paying particular attention to ensuring that all members of a specific team have the exact same notice period defined in their contracts. This is a simple point but can be very effective in this manner.

Furthermore an employer should attempt to restrict their employees to garden leave following their notice of resignation and by placing restrictive covenants into the employment contracts.

Varying the individuals dealing with a specific client

As stated previously, if a specific client is only used to dealing with a certain few individuals they may value the work that the individuals do for them over the actual company who represents them. In order to prevent this it is good practice for employers to vary the employees who deal with a specific client ensuring that sometimes they deal with the employees outside the core team assigned to them. This will create more of a link with the company that simply just the core team.

However, this will have to be balanced with the need to maintain consistency and quality for the client ensuring that they always deal with someone who is familiar with their client needs. If this is not the case the client may terminate the contract on their own accord.

Respond with a strategy to the threatened move

An employer should respond with a clear and concise strategy when they find out about a threatened move. Elements of the strategy should include the following elements:

  • Attempt to establish which team members are involved

  • Review the employment contracts of those involved

  • Analyse the interaction between employees and clients identifying which clients are most at risk  – again this should be balanced with the needs of the client

  • Consider splitting the team

  • Try to establish whether any members of the team have committed any wrongdoing