Never agree with another company to refrain from hiring each other's employees unless your workers and the other company's workers sign the agreement. Reason: Courts could view such agreements between companies as an "unreasonable restraint of trade" if workers don't know about the pacts.
Recent case: Greenbriar Rehabilitation agreed to provide physical therapists to work in Dove Healthcare facilities. But the agreement also said Dove could not hire any Greenbriar employees without Greenbriar's consent. Two years later, Dove violated the deal by hiring four Greenbriar employees. Greenbriar sued, but the Wisconsin Supreme Court tossed out the case.
The court said no-hire or noncompete agreements are usually allowed under state law. However, because the Greenbriar employees had no knowledge of the pact between the two companies, they were "unwilling participants" in the deal and had no chance to opt out. (Heyde Cos. Inc., d/b/a Greenbriar Rehabilitation v. Dove Healthcare LLC, No. 01-0863-FT, 2002)
- How to Fire an Employee the Legal Way: 6 Termination Guidelines
- Settling case? Consider 'no rehire' clause
- Asked to settle union election challenge, 9th Circuit punts it back to NLRB
- Must our handbook include a disclaimer to preserve our 'At-Will' status?
- ADA: How far must you go to 'reasonably' accommodate?