It’s a cutthroat world out there, and highly skilled talent is sometimes in short supply. Losing the key employees that add the most value to your products and services can be disastrous, leading to declining profits and market opportunities.
But there’s hope for employers victimized by competitors who attempt to poach corporate all-stars. If some other organization tries to unethically steal your best employees, you may have a remedy—even if you haven’t made employees sign noncompete agreements (which aren’t usually enforceable in California anyway).
Recent case: Praveen Chakraverty worked for the San Francisco-based investment bank Thomas Weisel Partners. The bank transferred Chakraverty to India to run a research division there, where he managed a staff that provided financial research to the investment bank at a much lower cost than U.S.-based researchers could.
Then Chakraverty was contacted by a competitor, BNP Paribas Securities. He told BNP that he might be able to deliver enough analysts for it to start its own research office. He then negotiated with BNP and eventually became head of its new office. It was staffed by 18 researchers who just happened to have quit Thomas Weisel Partners and made the move with Chakraverty.
His old company sued, alleging that he had breached his fiduciary duty of loyalty by essentially stealing prized employees and destroying the company’s operation in India. The court agreed and said Chakraverty was liable for his old company’s resulting losses. (Thomas Weisel Partners, et al., v. BNP, et al., No. 07-6198, ND CA, 2010)