Another Healthcare Practice Is Stealing My Employees!
In a tight labor market, it’s excruciating when competitors poach your best workers. Is there anything that you can do to stop them?
It’s no secret that good employees can be hard to find and even harder to keep. When you find good talent, you want to retain them for as long as possible. However, competitors may vie for your stellar employees by offering them more money or better benefits. When your staff takes the bait, your practice may face a sudden and detrimental shortage of workers. Luring a competitor’s employees, known as poaching, isn’t outright illegal, but it could violate some business laws nonetheless.
How to Prevent Poaching
Before addressing any potential legal recourse to employee poaching, it’s crucial to understand how to prevent poaching in the first place. Organizations often use non-competition clauses (also called non-competes) and non-solicitation clauses as standard tools to keep employees tied to the organization. However, while these agreements can help deter employees from leaving, recent legislation shows that the tide is turning against non-competes. Many are becoming unenforceable, and some states ban non-competition agreements entirely.
In states that allow non-compete agreements, the courts typically consider several factors when determining whether a non-compete is enforceable, such as:
- Is the agreement necessary to protect the employer’s legitimate business interest?
- Is there a reasonable time limitation?
- Is the agreement limited to a specific geographic location?
- Is the agreement supported by consideration or some employee benefit in exchange for agreeing to the non-compete clause?
See our related video, “Non-competition Agreements in Healthcare.”
The actual factors that the court would consider will vary by state. And keep in mind that these only end up in court if you sue your former employee for violating the agreement — an expensive endeavor that can also cause reputational harm as you seek to recruit and retain employees. If your state permits non-compete clauses, your contracts must be drafted with your state courts’ framework and considerations in mind to be effective and enforceable. Still, there are no guarantees. You should not rely on restrictive contractual agreements to keep employees. Instead, focus on being an employer that no employee would ever want to leave.
Can You Sue the Competitor?
When you enter into an employment contract with someone, you do not expect a third party to interfere with the terms of that contract. But what happens if another practice offers to pay any “damages” that the employee may owe you for breaching your contract? If another practice is truly meddling with your employment arrangements, you might have grounds for a lawsuit against them. These cases are sometimes based on something known as tortious interference with a business relationship or contract.
Unless there are exceptional circumstances, we generally do not recommend that clients pursue lawsuits and court-awarded damages when a single employee leaves their practice. The time, effort, and cost of pursuing such litigation would likely outweigh the potential damages that the court would award you, even in the best outcome. However, you may find it helpful to consult an attorney if one competitor consistently poaches your employees.
In sum, employee poaching is not illegal. In fact, recent trends in public policy favor employee mobility and open competition. Even so, consistent poaching — or a targeted, aggressive effort to recruit your workforce — may violate your employees’ contracts and give you grounds for suing that other practice.
The best way to prevent employee poaching is to treat your staff well and ensure they are satisfied in their jobs. Ideally, your employees will stay with you not because they must but because they feel valued and adequately rewarded.
Are you concerned about a competitor poaching from your practice? An attorney can help you understand potential legal solutions to your employment problems. If you are located in a state where we practice, our firm can develop employment contracts uniquely suited to the healthcare industry. Reach out for a free consultation.
This blog is made for educational purposes and is not intended to be specific legal advice to any particular person. It does not create an attorney-client relationship between our firm and the reader. It should not be used as a substitute for competent legal advice from a licensed attorney in your jurisdiction.