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Submitted by cheywood on


I just lost a direct to the competition. Even though I was doing O3's with this direct, this came out of the blue. (I"m obviously going to have to review how I'm conducting my O3's!) The direct did sign a non-compete clause...any suggestions on taking legal action?

timrutter's picture

Personally, unless you're commercially at risk, I wouldn't. It just comes accross as a bit of a corporate temper tanrtum. Your direct has already gone and damaged his reputation by breaching it.

Have you had a chat with him about why he decided to accept the offer?


xcelerator's picture
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Following Tim's comments, if your now-ex employee was in a position to take customers away, or sensitive financial information, you probably want to address it within your HR / legal departments. If you haven't already. Depending on the size of the company there may be a protocol for these situations.

Your company may want to notify the competitor company that the employee they just hired was subject to a non-compete agreement. Most companies that I've talked with about this subject are wary of entangling themselves and will usually be very cautious about hiring in this regard. The cost vastly outweighs the potential benefit, usually. Given that they're already in this situation, there's not much to be done except perhaps sue for breach of contract. I would only go down that path if, as Tim suggests, there is sufficient commercial risk of having that person in the employ of a competitor.

- D

Jrlz's picture

I would discuss with your company HR and Legal Departments.  There is exposure to your company and it is good to get out in front of it.  I would expect at the very least your company will send a letter to the former employee and new employer to remind them of the obligations under the non-compete agreement.   I would talk with your HR and Legal before having any contact with the former employee.   they will most likely advice against any contact.  I know you may be worried about looking like a heavy, but you have to put the well being of the company first. 

sklosky's picture

I recommend taking a moment to make this a learning opportunity.

So, to echo Tim's comments, what did you learn from this experience?

Also, did you conduct an exit interview?  This is a powerful tool that I neglected in the past.  I recommend taking advantage of this tool if possible.

As far as the legal actions, I suggest that you do the old Ben Franklin analysis and look at the pros and cons of this choice.  My experience is that 9 times (or more) out of 10, organizations do not pursue this course of action.

cheywood's picture
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Thank you all for your valuable thoughts.

Having had time to cool-off and reflect, I agree that this is a learning opportunity. And I also believe that for every door that closes, another opens.

VPfreedude's picture

 For purely selfish reasons I would suggest you avoid legal action.  You do not have a non compete (which here in Canada are tough to enforce anyway depending on the restrictions it includes) with the employee and I agree with an earlier poster it will seem like a knee jerk reaction to someone moving on.

The "selfish" reason is that no company is so good that they don't need to attract talent.  If you proceed with legal action against the employee who left (assuming no direct wrong doing has been done) the word will get out and you will be a less attractive employer.

I have seen this happen to people and have had recruiters ask me why no one will interview and my only response was that most people know the company's reputation and have no interest in being part of a firm that will one day make them the "bad guy".