Canadian HR Reporter

Canadian HR RepoRteR March 23, 2015 10 News/executIve serIes Diversity lurING < pg. 1 Poaching can impact reasonable notice covenant agreement which says that they can't solicit employees for a period of time." Poaching can also be problem- atic legally when the person doing the poaching is a fiduciary of the former employer, said Nieuwland. "For example, when you have re- ally senior employees who depart or leave — often this happens in the financial services industry — and because these are very senior- level people who have responsibili- ties for directing the business of their former employer, they may have fiduciary obligations to their former employer. So that's a matter of common law — it's not a con- tractual obligation," he said. "One of those (common law) obligations on fiduciaries is not to solicit their co-workers to leave and come to a new place of employment for a reasonable period of time." Legal risks may also arise if the employee has access to valuable assets such as confidential infor- mation, customer or client lists, intellectual property or trade se- crets, said Stasyshyn. "A lot of the inherent value of a company in the marketplace is based on that, so what everyone is trying to do is to protect those interests." If poaching is done with the intent to access that information, the courts may be inclined to in- tervene, he said. "If it is to gain access to a com- petitor's IP or trade secrets, cus- tomer list, employees, then to that extent the courts will intervene depending on how egregious it is, and depending on the level or status of the employee within the company, their access to that in- formation," said Stasyshyn. "e issue is really about the protection of proprietary interests versus the reluctance of the legal or judiciary system to enforce non-competition clauses." Reasonable notice Another downside? Poaching can impact the amount of reasonable notice the employee is entitled to, if the employer ever decides to ter- minate his employment, he said. "If you induce an employee to come to you and he leaves his other place of employment, and you subsequently find out that that employee does not meet your standards and you wish to let that employee go, you've probably now created a much larger com- pensation package for severance. Because inducement is one of the grounds for a court determining what is the proper notice period and severance package." ere are some relatively com- mon tort claims associated with poaching, said Daniel Lublin, founding partner at Whitten Lu- blin in Toronto. "e first is intentional interfer- ence with economic relations or interfering with a contract. Basi- cally, if you know that someone has a contract with somebody else and you poach them, you can be sued for inducing the breach of contract — if they're breaching their contract... and those claims arise relatively often, I'm seeing that happen a lot in my practice." Another common claim is around confidential information, he said. "The competitor that's suing will say, 'You took our employee and he had confidential informa- tion, and you've induced him to violate his confidentiality obliga- tions, or his or her non-solicita- tion or non-compete obligations.'" Protecting your interests Employers should make sure the employee is not bound by a re- strictive covenant with his prior employer, said Nieuwland. "(Also), if you've got a really senior person who comes over to your shop and wants to bring new people, you have to be cognizant that they may have fiduciary ob- ligations that prevent them from doing that." It's also critical to be clear with new recruits about not taking con- fidential information that belongs to their former employer, he said. "e number of cases I've had where that doesn't happen is as- tounding, and it causes real signifi- cant problems for new employers." e best way for an employer to protect itself is to familiarize it- self with the employee's contract — and draft a good contract of its own, said Lublin. "You want to know if he has or she has an employment contract with the company they are coming from; you want to familiarize your- self with any terms that could be considered restrictive covenants; you want to address that if you're an employer in your own contract with the person you're poaching; you want to have clauses that say you are basically indemnifying or protecting yourself in the event there are any claims." But there's no perfect, bullet- proof solution and there are grey areas, said Stasyshyn. Employees naturally take knowledge with them when they migrate from one company to another, and there's no way to entirely stop that. "No matter how many con- tracts you have, the fact of the matter is the employee has that knowledge. You can't extract it from them, you can't give them memory loss. ey know those things and it is naive to think that in some manner or fashion they're not going to use that information with the new employer," he said. "Even when you have agree- ments, however well-detailed they are, you still can't stop some- body moving from one company to another and taking with them information... that's why the area is so rife with litigation — because everybody's trying to find what you can do and what you can get away with, and what you can't." Canada's Safest Employers Psychological Safety Award is looking to honour workplaces with leading mental health programs in the country. Now in its fifth year, the prestigious Canada's Safest Employers competition recognizes employers across the country with the best occupational health and safety practices. Psychological safety is a critical issue for business. Mental health problems are expected to cost employers $198 billion in lost productivity over the next 30 years, according to the Mental Health Commission of Canada. For more information, and to nominate your organization, visit www.safestemployers.com for details. Nominations close June 1, 2015. Join us for Canada's Safest Employers Awards taking place this fall in Toronto. Details to be announced on the website soon. Presented by Centre for Mental Health in the Workplace Great-West Life www.workplacestrategiesformentalhealth.com Psychological Safety Sponsor Is your organization a leader in workplace mental health? pools to include a more women. While the intention of this ses- sion was to throw a spotlight on the critical nature of revitalizing board recruitment practices, it also reminded us of the continued need for a review of all employee recruitment. As was suggested by Deborah Rosati, before HR leaps to the rescue offering all of its tools at the disposal of its board, HR leaders must first look within. In the words of the Canadian Board Diversity Council, "Imag- ine if Canada's boardrooms look like Canada." e council's vision to have Canadian companies become globally competitive by appointing the most qualified directors to boards from a tal- ent pool that reflects Canada's diversity must also become the norm at organizations they over- see if they are to truly reach their potential. Barbara Kofman is SCNetwork's lead commentator on organizational ef- fectiveness and founding principal of CareerTrails, a strategic coaching and HR solutions organization committed to providing clients with the personal- ized processes and information they need, to achieve the individual and organizational outcomes they are seeking. She has held senior roles in re- sourcing, strategy and outplacement, and taught at the university and col- lege level. Barbara can be reached at bkofman@careertrails.com. board buIldING < pg. 9

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