What is employee poaching? Is it illegal and how to prevent

Poaching is a word often used in the context of hunting, typically animals. But do you know employee poaching is legal and one of the thriving recruitment strategies? 

In fact, 74% of hiring professionals admit to poaching, with 66% seeing it as a competitive advantage. Big players like Amazon are among the top three poachers in the tech industry, while Facebook dominates social media poaching. 

While poaching might sound like the victim has no choice, employees, unlike animals, have the power to decide whether or not to accept the offer. So, is poaching a smart move or an ethical gamble? Find out the answers in this comprehensive guide. 

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What is employee poaching?

Employee poaching, also known as job poaching, talent poaching, or employee raiding, refers to the legal practice of employers approaching employees from direct competitors or former employers to convince the employee to join their company. This type of recruiting employees often leads to non-compete clause issues. 

SHRM studies show that 77% of employers struggle to find skilled talent. One way to quickly fill this skills gap is by poaching employees from competing companies.

These individuals often have the experience and skills you need, as they work within the same industry and niche, making them hard to find elsewhere.

Such candidates often fall under the “passive candidates” category since they aren’t actively looking for a job. However, they can be converted under the right circumstances with little persuasion. 

Note: Poaching is not limited to a specific industry or niche. Any company can poach employees, which is beneficial because it allows you to gain skilled talent and attract top performers away from your competitors. 

How does employee poaching work?

Employee poaching is commonly practiced in fields involving technological knowledge, such as coding, programming, analysis, and software development. However, it is not restricted to one field alone.

Since such skills are in high demand, recruiters contact workers from their competitors and offer them better pay, benefits, incentives, etc., to leave their current organization. 

While job poaching can encourage healthy competition, drive innovation, and spread knowledge across industries, benefiting the sector overall, critics view it as disruptive, potentially destabilizing businesses and fostering mistrust between competitors.

Let’s see how, as a recruiter, you can poach skilled employees. 

Identify target candidates: Identify highly skilled employees at your competitor firms. Conduct thorough research for companies within the same sector and find individuals with skills and experience that align with your company’s needs. 

Reach out to talents: Once you have identified potential passive candidates, reach out to them. Use professional networking sites like LinkedIn or email. Ensure you aren’t sending out the same message to all of them. Instead, personalize each message to build connections and present the benefits of joining your company. 

Talk about benefits: Focus on your company’s advantages, such as better pay, career growth, company culture, and work-life balance. This will help persuade the candidate to leave their current job.

Build relationships: Successful poaching depends on building a connection with the candidate. Take time to understand their motivations and concerns, which allows them to present a more appealing offer.

Understand legal complications: While employee poaching is legal, recruiters must fully understand its implications. It’s important to avoid actions that could harm your company’s reputation.

For example, disrespecting non-compete agreements or approaching a candidate in a way that disrupts their current work environment should be avoided, as these actions can damage both your personal and your company’s brand image.

How to deal with employee poaching?

Below are some ways to prevent poaching, most of which are anti-poaching strategies designed to prevent losing out on talent. 

Sign a non-compete clause (NCC) with employees

A non-compete clause, or a non-compete agreement, is a contract between an employee and their employer that prevents the employee from working for competitors for a specific period after the employee’s termination. 

It also prevents employees from starting their own competing businesses after their employment with the existing employer ends. Such a clause is between the employer and employee rather than among competing employers. 

Organizations can use non-compete agreements to prevent employees from sharing company secrets or information with competitors. 

For example, suppose a marketing manager leaves their position at a digital marketing agency. In that case, their non-compete agreement might prevent them from joining another marketing agency or starting a similar business in the same market for up to six months. 

This restriction helps the company protect its trade secrets and client relationships. However, if the non-compete clause lasts too long, it could limit the employee’s future career opportunities, making it harder for them to find work in the same industry.

Measure employee engagement and address their needs

Conduct an employee engagement survey to understand potential pain points your employees are experiencing. This could possibly prevent them from looking for other opportunities elsewhere. Research shows that organizations with the highest employee engagement rate are 21% more profitable. 

Conduct regular meetings, improve internal communication, and provide learning and development opportunities to increase engagement.

80% of workers believe providing learning and development opportunities makes them feel more engaged. Show your employees they are more than just a number or result. 

Also, pay attention to top performers in your organization to prevent them from feeling enticed by poachers. Improve benefits, such as flexible working hours, better salary, promotion opportunities, recognition, etc., to grow their expertise and skills. 

Create a non-poaching agreement with the leading competitors

A non-poaching agreement is an official arrangement between competing companies that prevents them from recruiting each other’s employees. This agreement can be written, verbally communicated, or through coordinated practices.

Examples include agreements where companies agree not to hire each other’s employees or to align the salary offers made to their staff. This agreement may also apply if an employee applies for a job independently.

While this helps companies retain their top talent and prevents them from losing skilled employees, it can also limit those employees’ ability to seek better opportunities, whether financially or otherwise.

Although non-poaching agreements may benefit the companies involved, they can violate antitrust laws if not set up correctly. Many companies choose to use non-compete agreements instead to avoid legal issues.

Though such agreements are a great way to prevent competitors from hiring your employees, the hard catch is that non-poaching agreements are illegal. Penalties for no-poaching agreements can be harsh. Companies may face fines of up to $100 million, while individuals can be fined up to $1 million.

However, agreements between competing companies, where one company agrees not to try to recruit employees from the other, can be legal if they are part of protecting a valid business reason. 

For example, if the agreement helps protect trade secrets or other important business interests, the law may allow it.

Use a non-solicitation agreement

A non-solicitation agreement is like a non-compete agreement but focuses on stopping former employees from contacting or trying to do business with their old employer’s clients and customers. 

With this agreement, employees can still work for a competing company but cannot take clients.

For example, if a sales manager leaves a company and joins a competitor, they can still work at the new company but cannot contact their old clients to bring them to the new business. This protects the relationships the employee built while at their previous job.

A non-solicitation agreement is completely legal in the United States, given it is reasonable and complies with relevant jurisdiction laws.

Develop a positive company culture

Company culture includes the values and principles that guide a business’s operations, strategy, and relationships with employees, customers, and stakeholders. When a company’s culture aligns with an employee’s values, it can boost loyalty and retention. 

For example, if a company fosters creativity and teamwork, it can attract employees who thrive in such an environment. Studies show that 70% of employees say they would stay longer at a company with a positive work culture. 

A strong workplace culture promotes employee engagement, productivity, and overall job satisfaction, making employees more likely to feel motivated and connected to their work.

Also read: How to improve the workplace culture?

Is it legal to poach an employee?

Poaching employees is generally considered legal in the United States and everywhere else. This means that there are no specific laws prohibiting the practice of hiring employees from a competitor. However, this doesn’t mean any restrictions or potential legal complications. 

The important thing is not to overdo it. Rather, when done right and ethically, poaching is a smart recruitment strategy to hire a talented workforce. 

However, requesting sensitive and legal information from companies can be considered illegal and land you in trouble. Also, not everyone should consider poaching just because it is legal. 

Is employee poaching unethical?

Yes and no. 

Whether or not employee poaching is ethical depends on the circumstances and how it is done. Though it is legal, it can be harmful to companies from who employees are being poached.  

Key factors in evaluating the ethics of employee poaching include:

• Contractual obligations: Check if the employee is bound by a non-compete or no-poach agreement with their current employer.
  
• Industry norms: Consider if poaching is a common and accepted practice within your industry.
  
• Employee autonomy: Approach the employee fairly and respect their decision if they’re not interested in switching.
  
• Intentions: Ensure you aim to secure top talent and intend to deliver on promises made to the employee.
  
• Reputation risks: Be mindful since gaining a reputation for poaching could harm your company’s image and relationships.

Recruiters should understand that it’s generally considered bad practice to actively recruit employees from a competitor. Doing so can damage trust between companies. 

Job poaching becomes ethical and unethical depending on how recruiters approach and handle the process.

Can companies sue you for poaching employees?

Yes, employers can sue for poaching, especially if you break a non-compete or no-solicitation agreement. The circumstances under which a company can sue you may differ based on the nature of poaching, breaking any existing agreements between parties involved, etc. 

Legal grounds for lawsuits 

Tortious interference: This occurs when a company hires an employee who is bound by a non-compete or non-solicitation agreement. If the hiring company knowingly encourages the employee to break that agreement, the original employer can sue for interference.

Misappropriation of confidential information: If an employee takes trade secrets or confidential data to their new job, the original employer can sue for theft of proprietary information.

Breach of duty of loyalty: Employees owe loyalty to their employer. If they take sensitive information or recruit other employees while still working for the company, this may be considered a breach, giving the original employer grounds for a lawsuit.

How should a company handle job poaching?

While companies can take many steps to prevent poaching, it’s impossible to stop it completely. Here’s what you can do when your employees are being poached: 

Succession plan: Prepare for employees’ departure by identifying and training team members who can step into key roles. This will ensure that your business runs smoothly even if someone important leaves.

Offer an easy offboarding experience: A great offboarding experience is a good way to end things. Do not harbor negative feelings and ensure employees remain happy with the company. There is a chance that employees might return in the future.


Find out the reason for leaving: When an employee decides to leave, hold an exit interview to understand their reasons. This helps you learn about any issues in your hiring process, work culture, or overall experience. Use this feedback to avoid making the same mistakes with others.

Expand beyond competitors: Avoid direct competition by recruiting talent from different industries. Focus on transferable skills and unique perspectives that align with your company’s needs. This creative strategy helps sidestep non-compete issues and can even drive innovation within your organization.

Wait it out: Monitor employees who leave competitors and track when their non-compete agreements or vesting incentives expire. Delaying recruitment ensures you avoid legal risks while still gaining valuable talent later. This cautious approach works well for companies focusing on long-term goals rather than immediate hiring needs.

Also read: What are the potential legal risks of pre-hiring assessments?

Should you poach talents?

Yes, but with caution, because employee poaching can be a powerful strategy to acquire skilled individuals who bring immediate value, especially in highly competitive industries. 

The outcome of any recruitment process is to hire talented and skilled people. If you can achieve this by bringing top talent from competitors while reducing their workforce, that’s a win-win. 

However, this strategy isn’t for everyone. Aggressively poaching employees from competitors can backfire, potentially damaging your reputation and company image. 

Following best practices, as outlined in this blog, and prioritizing ethical hiring practices are crucial to ensuring success and maintaining ethical standards.