In San Diego’s business market, valuable employees can often come from your competitors. California law favors employee mobility, but hiring from your competition without proper precautions can lead to a costly trade secret misappropriation lawsuit.
It is still possible to grow your team without facing legal consequences. The key is drawing a line between lawful recruiting and illegal use of confidential information. Understanding this distinction can help protect your business while benefitting from a new hire’s legitimate skills and experience.
Mobility vs. misappropriation
In California, noncompete agreements are generally unenforceable under Business and Professions Code section 16600. This means a company usually cannot stop a former employee from working for a competitor. However, that does not mean the employee is free to bring over their old employer’s confidential information.
Trade secret law still strongly protects things like client lists, proprietary pricing and specialized business processes. You can hire the person, but you still cannot access their former employer’s data or use it to gain an unfair advantage.
Pre-hiring phase: The interview strategy
When vetting a candidate, it is important to ask whether they are still under any confidentiality or nonsolicitation agreements from a current or former employer. It is also vital to clearly tell them not to bring, share or use any proprietary information from their current job during the interview process. Taking these steps shows that your company is acting in good faith and is making a real effort to avoid receiving or applying any trade secrets or confidential information that does not belong to it.
The onboarding documentation
In the offer letter, it is best to include a clause where the new employee confirms they are not bringing any third-party trade secrets or confidential information to your company. On their first day, it is also critical to give them a clear written instruction that they must not use, upload or refer to any materials from a former employer on your systems.
Keeping data separate by requiring employees to use only company-issued devices and software can help prevent information from different employers from mixing. These steps also create a clear record that your company is taking reasonable precautions to reduce the risk of facing trade secret disputes.
Protecting the growth of your business
When you hire workers from competitors, your business practices should show respect for intellectual property and fair competition. A San Diego lawyer can review your hiring protocols and employment contracts to ensure you have safeguards from a competitor’s scorched-earth legal tactics.