If I open a business as a 49% owner and my current employment contract has a stipulation that prohibits me from recruiting from their company for a 2 years, can my partners do such recruiting?

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If I open a business as a 49% owner and my current employment contract has a stipulation that prohibits me from recruiting from their company for a 2 years, can my partners do such recruiting?

If I personally didn’t recruit but my partners do, is that OK?

Asked on March 23, 2015 under Employment Labor Law, Pennsylvania

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

Contracts are, in theory, enforced as written. In theory, if the contract only applies to you and to business/entities controlled by you, then the business (which as 49% owner you do not control) and your partners could recruit. But that is a *very* narrow interpretation, one which a court might not choose to take; rather, if there was litigation (a lawsuit) over this brought by your current employer, a court could feel that since you almost certainly or necessarily took part in the recruiting--for example, told your partners who would make a good recruit and not, helping them target prospects--that *you* still did the recruiting, even if you hid behind others. It would be very risky to do this--there are many good candidates out there for any job (my wife is in HR; finding qualified candidates is not, she tells me, the problem), so you should recruit elsewhere. After all, even if you were to win a lawsuit from your current employer, they could certainly at least bring such a lawsuit in this case, forcing you, your partners, and your business to spend time and money defending yourselves.


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