Can a subcontractor put in its contract with the contractor, that the sub’s employees cannot be hired by the contractor?

UPDATED: Feb 9, 2012

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Can a subcontractor put in its contract with the contractor, that the sub’s employees cannot be hired by the contractor?

Our company was recently approached for employment by an employee from a company with which we have a contract. Apparently the contract precludes our ability to hire their employees. We have been warned that it will cost us 1 year salary ($85,000) to hire this guy. He asked us for a job because he was too stressed out in his company. Is such a contract stipulation legal?

Asked on February 9, 2012 under Employment Labor Law, California


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

An agreement to not hire another company's employees or former employees is legal and enforceable. If the contract which your company signed included this term, therefore, you cannot hire this individual. If the term had not been in the contract when signed by your company, the subcontractor could not put it in later; but if your company agreed to this term, it is enforceable against you.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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