A recent lawsuit filed against Apple by a company that makes lithium-ion batteries for electric cars may land the tech giant in hot water if, as is alleged, the company poached employees specifically to provide similar work on a project that would directly compete with the smaller firm.
A123 Systems, which has its headquarters in Livonia, Michigan, specializes in the manufacturing of batteries and energy storage systems for use in a variety of contexts and products, among them electric cars. The company contends that Apple specifically targeted five of its employees beginning in June 2014, in what A123 calls an “aggressive campaign.” Apple eventually hired one of A123’s engineers, who then recruited the four former coworkers. All of them reportedly began working at Apple in January 2015.
At issue is whether a key part of A123’s allegation turns out to be true. The company claims that Apple targeted the five workers in question because they were involved in the development of lithium-ion battery technology — and that Apple is attempting to develop electric cars of its own. In other words, in their new roles, the employees would be in violation of non-compete and nondisclosure agreements they signed when first agreeing to work for A123.
The reason so much hinges on this part of A123’s argument is because, otherwise, the firm doesn’t appear to have much of a case against Apple. The fact of the matter is that, although the ethics involved in poaching employees may be suspect in some situations, the practice is not actually illegal unless it involves the intentional breaching of an employee’s contract under prompting by another employer.
Legal parameters of employee poaching
This intentional damaging of an employee’s contractual relationship is called tortious interference. To prove a claim of tortious interference, a party (such as A123) must show that a contract existed between the company and its employees, that a third party knowingly encouraged the breaching of that contract and that the employee did, in fact, breach the contract, causing damage to the original party. In its lawsuit against Apple, A123 is seeking damages, as well as a one-year injunction that would prevent its former employees from working in any way that directly competes with A123.
Needless to say, poaching employees can be risky business, and companies found to have done so through tortious interference may be liable for damages. For organizations that believe their employees are likely to be courted by competitors, non-compete and nondisclosure agreements are absolutely critical, but it’s also helpful provide the types of intangible benefits — like a nurturing and supportive work environment — that employees won’t want to give up.
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