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Staff Poaching Rises In The Downturn

June 23, 2010

June 23, 2010 (Mountain View, CA) – Daniel McCoy, partner and co-chair of the Employment Practices Group and Litigation Group at Fenwick & West LLP, was recently quoted in the Daily Journal article "Staff Poaching Rises In The Downturn." As companies begin to hire again, employment lawyers are seeing a growing trend in unfair competition and trade secret litigation from businesses poaching employees from direct competitors. When employees, particularly top executives or positions that rely on obtaining new business such as sales representatives and agents, make lateral moves, they can take with them sales contacts, confidential marketing plans, trade secrets and other sensitive information. The concern is a salient one in California which, unlike most states, largely bans non-competition clauses that prohibit employees from competing against their former employer. As a result, some companies going after a former employee for alleged theft of trade secrets will fight to have the case heard in other states, such as where the company is headquartered, even if the employee is a California resident working out of a California branch. Dan McCoy observes that employers at the tail end of a recession need to be prepared to deal with an uptick in these lawsuits because of greater movement among employees at competing businesses. Furthermore, McCoy states, "You see less of that in a down economy because people aren't moving around as much - people are either getting laid off or sitting tight and as hiring picks up, you tend to see more of that claim. Employees are moving around again, so companies need to be aware of this kind of issue." To read the Daily Journal article in its entirety, click here (subscription required).