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Employers warned on ‘staff poaching’

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Employers looking to strengthen their workforce by headhunting from rival firms should be wary of the legal risks, employment experts have warned.

With several high-profile poaches occurring in British businesses over the past few months, employers have been told to make sure they follow employment protocol to the letter in order to avoid court claims from depleting rivals.

This year, the Royal Bank of Scotland lost almost 1,000 employees to rival banks, such as Barclays Capital and Nomura, as competitors could offer improved wages and bonus packages, but Susie Munro, Employment Law Editor for XpertHR claims employers must be careful of ‘restrictive covenants’ when approaching rival firms.

“Firms can try to stop employees joining a competitor by including a restrictive covenant in their contract; this is a contract clause that attempts to limit the employee’s activities after he or she leaves the firm,” she said.

“Restrictive covenants can also be used to prevent former employees setting up in competition and poaching their former colleagues from the firm.”

“If another firm is trying to poach employees who are covered by restrictive covenants, that firm could be found to be acting unlawfully by inducing the employees to breach their contracts.”

Inter-dealer broker, Tullett Prebon, is currently embroiled with rivals BGC Partners over illegal poaching allegations after 50 employees were asked to defect. BGC Managing Director, Tony Verrier, admitted to the High Court that he ‘technically’ asked staff to breach their contracts with Tullett but denies any wrongdoing.

The High Court’s imminent ruling will give a strong indication as to how the country’s law views staff poaching.


Written by Andrew Hodges

December 21, 2009 at 10:52 pm

Posted in Comment, LinkedIn

Tagged with , ,

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