Corporate Divorce Series: Is Employee Solicitation New Kind of Custody Dispute?
If you’ve been following my corporate divorce series, you are familiar with my view about who owns what at the end of the employment relationship, who pays what to whom, and even how to end the relationship. But I have yet to address the notion of custody and whether my employment-as-marriage metaphor withstands an analogy to the post-employment solicitation of employees.
It is the employee’s relationship with fellow employees – and the employer’s attempt to insert itself into this relationship – that drives this discussion.
At first blush it might seem objectionable to compare the employer-employee relationship to a parent’s relationship with a child. Employees are adults (setting aside illegal child labor and the teen work force) capable of deciding where and with whom they want to work. Adults do not merit the same protection our legal system provides for children, especially in the context of custody disputes. And the concept of best interests of a child – which drives custody decisions – just doesn’t apply in the employment context because adults should decide for themselves whether they want to stay with a particular employer or move on to something new.
But businesses spend a considerable amount of time, money and resources attracting and retaining employees. Given that investment, shouldn’t a business have the right to prevent others from reaping those rewards?
Most businesses think so and employ post-employment “non-poaching” restrictions to make this point. Typically, these post-employment covenants prohibit an employee from soliciting other employees to leave one employer to join another.
While the term “soliciting” has been the subject of many court decisions, most courts agree that “solicitation” requires one person actively to convince another to take action the individual perhaps wasn’t otherwise contemplating. In other words, the concept of solicitation requires proof of inducement, encouragement or persuasion to leave one job for another. But solicitation does not encompass generalized marketing behavior such as LinkedIn updates, press releases, and other widely disseminated promotional activities.
But setting aside the legalities of interpreting (and of course enforcing) these post-employment restrictions, these provisions have a practical impact. Our business lives, like our personal lives, depend on relationships to flourish. And while an employer may own the product of the employment relationship – the goods that are sold or the services that are provided – the same cannot be said of the relationship among employees. Unlike a business relationship, which might be the legitimate subject of an ownership claim, a personal relationship just cannot be “owned” in the way we think about most possessions.
The law already prevents people from poaching employees through lies, false promises or concerted behavior that, at its core, is intended to do nothing more than to cripple a business.
So if the law already protects against bad post-employment behavior, is there any real harm in using these contractual provisions? Incorporating those legal principles into a contract is a good way to warn others that this behavior will not be tolerated. And most jurisdictions will enforce these provisions (except perhaps in California, which applies its own unique twists to regulating post-employment behavior). But if enforcement means the legal muscle of an injunction, the practical problem remains that in only the rarest of circumstances will the legal system enjoin someone from leaving employment. Likewise, courts will only prevent someone from taking a new job if a contract expressly prevents it and other legalities are satisfied. And while damages may flow from the breach of an employee non-solicitation provision, those damages may be difficult to prove and it may not be financially worthwhile to pursue a claim.
So I return to my initial question: does the employment-as-marriage metaphor withstand an analogy to the post-employment solicitation of employees? It really doesn’t. The relationship among employees is significant both to the employee and the employer, and carries significant legal responsibilities, but unlike child custody disputes which significantly impact children in an incalculable way, employees may be replaced at a quantifiable cost. And while the employment relationship is undoubtedly critical to the success of a business, adults, unlike children, are capable of making their own career and judicially unassisted life decisions.