Tuesday, August 21, 2012

IT Consultants, Personnel Recruiters and Non-Compete - Non- Solicitation Agreements in Pennsylvania

I am a Personnel Recruiter: Is My Non-Compete - Non-Solicitation Agreement Enforceable?

Over the years, the business of IT Consulting has expanded and expanded so that, today, many companies routinely retain temporary workers who are IT specialists under a contract with a personnel supply firm.

John's video generally discussing non-compete law in Pennsylvania:



This typically results in two separate contracts: 1) a contract between the end user (the company requiring manpower) and the recruitment firm wherein the end user agrees to pay the recruitment firm a fee over a fixed period of time in exchange for provision by the recruitment firm of temporary workers needed to complete a given project; and, 2) a contract between the recruitment firm and individuals who agree to go to the end user for a specified time frame and provide services on such projects pursuant to an independent contractor agreement.

In other cases, recruitment firms provide permanent employees to corporate clients and are paid a one time fee.

This Post is not intended to discuss the overall enforceability of the non-compete agreement between you and your former employer.  Rather, it is designed to address two common issues faced by employees who, having found work subsequent to leaving their former employer, desire to understand the boundaries for contacting candidates and clients of their former firm.

Click Here to read our Post on general rules relating top the enforcement of non-compete agreements in Pennsylvania.

I Have Been Recruiting IT Candidates for Years: May I Contact Them After I Leave My Pennsylvania Employer?

Over time, people who work for recruitment firms develop relationships both with candidates (i.e. individuals potentially suited for various positions) and clients (i.e. corporations who require candidates).  Most people who work as personnel recruiters are required by their employers to execute non-compete agreements as a condition of employment. 

Upon departing from employment to strike out on a new venture, such persons often call me and ask: can I contact the candidates that were part of the data base of my old firm?  The answer is: a qualified yes.

If you can locate, identify and contact such candidates via social media such as Facebook, Linked-In, etc., then you are likely going to be fine.

However, one may not utilize the data base of a former employer to identify and contact such candidates.

Human Resource Consultant: May I Contact the Clients of my Former Employer if I Have a Non-Compete or Non-Solicitation Contract in PA?

In the context of the subjects discussed in this Post, contacting and/or doing business with corporate clients who purchased manpower from your prior employer is a much dicier proposition for persons bound by non-compete agreements.  That is so because corporate clients are the ones that pay recruitment firms for the candidates they provide.  Hence, any time a former employer learns that its former employee is doing business with one of its corporate clients, a dispute will likely blossom.

Here is one rub.

The IT field is extremely specialized, yet the vocabulary used to identify the specializations remains undeveloped.  Hence, the prohibitions in a typical non-compete agreement in the IT consulting industry are usually overbroad, and thus, paradoxically, vague.  For example, your old employer recruited only software engineers.  Does that mean that you cannot recruit and provide a software programmer to a corporate client of your former employer?

Language in Non-Compete Agreement Key
Here is another rub.

Your old employer typically "leases" independent contractors to its corporate clients for specified time periods, typically designed to provide manpower for only so long as it takes a given project to be completed.  Your new employer, on the other hand, supplies only recruits for permanent hire by corporate clients.  Is it a violation of your non-compete to provide such services when, in fact, your new employer does not truly "compete with your prior employer?

How to Avoid a Lawsuit Over my Pennsylvania Non-Compete Agreement

The bottom line is: IT personnel recruitment is a complicated business, and non-compete agreements in this field are often overly broad and potentially unenforceable in whole or in part.  However, former employers often will not hesitate to sue if they believe their financial interests are being compromised by a former employee.  And, there is nothing you or anyone else can do to stop your former employer from filing a lawsuit, even a baseless lawsuit, if that is what it wants to do.  Therefore, the best approach is to develop a careful strategy that enables you at once to continue working in your chosen profession while minimizing the risk of suit or, if suit is unavoidable, the risk of a successful suit by your former employer.

Philadelphia Are Employment Attorney Representing Employees

Representing Pennsylvania Employees Since 1991
John A. Gallagher is an employment lawyer who represents employees in Pennsylvania. 

John typically represents employees who need an employment lawyer in Philadelphia County, Chester County, Delaware County, Bucks County, Berks County, Lancaster County and Montgomery County.

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Thanks for checking in with us.

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