The Ethics and Etiquette of Employee Poaching 

By CHERONE DUGGAN

Employee poaching, while ethical, may not always be legal. It involves recruiting employees from direct competitors or former employers, often leading to non-compete clause issues. Companies can handle these issues by ignoring them, waiting out the clause or thinking beyond direct competitors.

Employee Poaching is a Misnomer

“Employee poaching” sounds like an illicit animal hunt. The simple act of asking whether employee poaching is ethical reveals how deep into our psyches we let the animal metaphor creep. Unlike animals, people can make choices and cannot be owned. Given this fact, employee poaching isn’t an ethical dilemma. It’s a misplaced metaphor.

Unlike elephants, employees aren’t an endangered species who can be unfairly captured. And unlike cattle, employees don’t belong to their employers, even if they sign non-compete agreements. Employees are independent people with autonomy, agency and personal responsibility. That makes them free to wander off to another employer whenever they want. And that’s a good thing for everyone. Because the threat of losing employees keeps the labor market purring and incentivizes employers to treat – and pay – people well.

Dealing with the Reality of Non-compete Clauses

“Poaching” usually refers to the practice of targeting – and taking – the employees of direct competitors or former employers. These approaches are fraught with non-compete clause problems. Many employees are required to sign non-compete and non-solicitation agreements as a condition of their employment, and these contracts can restrict employees’ mobility – or hiring choices – for a year or more after they leave their employer.

Non-compete clauses are designed to stop free labor markets from becoming free-for-alls. They encourage transparency within companies and can boost retention rates. But they may stifle wages and impact labor mobility. Regardless of their broader effects on the economy, non-compete agreements are a reality for many employees companies want to hire.

People who already have jobs are usually pretty good at them. That’s why recruiters prize “passive candidates” who aren’t actively looking for a new job, but who could be persuaded to ditch their current one, under the right conditions. Sourcing passive candidates is sometimes referred to as “poaching,” too, especially if a company hires multiple people – or teams – away from another company.

When it Comes to Dealing with Non-compete Issues, Companies Have a Few Options:

• Ignore them and take the risk: Nobody ever gives people this advice. But it’s the gutsy, legally-gray-area approach, for employers and employees alike. Many non-competes are unenforceable and you can weigh the likelihood of a lawsuit before taking the leap. If this suits your risk tolerance levels, it could pay off for a key hire in a tight competitive market. But it’s a risk that you will have to weigh against its potential reward. If the employee in question is alluring enough to recruit regardless, it may be a risk worth taking. But you will be responsible for the consequences if they come back to bite you.

• Circumvent them by waiting a few years: Keep an eye on departures at competing companies and take note of their non-compete clause (and vesting incentive) timelines. This can help reduce your risk if you’re okay with delaying future gains. This approach plays a long, risk-averse game – which may or may not be appropriate for you, given your industry and growth goals.

• Avoid them by thinking beyond your direct competitors: This is the easiest way to avoid non-compete clause problems. Think beyond the obvious poaching grounds of your direct competitors and previous employers. Ask the people you would otherwise want to poach for referrals, and focus on industry-agnostic skills that your company needs to succeed, instead of relying on industry-specific people. This is the most creative way to source and hire people who may end up disrupting your industry and fueling your future growth. There’s a risk in hiring good new people, though. Other companies will try to poach them from you.

Cherone Duggan is an independent user experience writer. She is not an attorney.