In today’s competitive world, every company wants to have the best talent on its team. Unfortunately, it’s not easy to find top talent not engaged with another employer, leaving you with only one option; poaching talent from your competitors.
Poaching talent could land you into problems with the employee’s employer, especially if the employee had entered into a non-compete agreement with them.
Before the former employer files a lawsuit, they may send an employment cease and desist letter. If you have received a cease and desist letter and are unsure how to handle the situation, this guide can give you some pointers.
Understanding What Cease and Desist Letters Are
A cease and desist letter is a letter sent by one party to another demanding that the recipient stops engaging in a specific action that violates the sender’s rights. The letter also demands that the recipient avoid repeating the same in the future.
There are several situations where a person can receive cease and desist letters. In many circumstances, cease and desist letters are used in cases involving violations of IP rights and breach of contract. While a legal document, a cease and desist letter does not wield the same power as a court order. However, this does not mean it is less important than a court order.
It acts as a warning shot to imminent legal action. In most cases, the sender is open to an amicable resolution to a dispute if the recipient is willing to resolve the matter.
If not, the next cause of action is filing a lawsuit. If you want to understand this subject better, this Heerlaw article looks at cease and desist letters in detail and can be a good read.
When Might You Receive One
Employment cease and desist letters often apply when employees violate an employment contract between them and a former employer or when they share their former employer’s trade secrets with their new employer. High-ranking employees are sometimes required by their employers to sign a non-compete agreement.
Non-compete agreements prohibit employees from starting a similar business as their employer or working for a competitor for a specified period after leaving their employer. If you go against a non-compete agreement and take a job with a competing company, your former employer has a right to sue you for a violation of your terms.
In most cases, they will start by sending an employment cease and desist letter demanding that you stop your engagement with the new employer.
You can also receive an employment cease and desist letter as an employer if the aggrieved party believes you knew, or you ought to have known that the employee in question had a non-compete agreement with their former employer. Therefore, it is important to ensure you do due diligence when hiring to avoid the chances of facing aiding and abetting a violation of an employment contract lawsuit.
Responding to an Employment Cease and Desist Letter
There is no formal format for a cease and desist letter. But most will have “cease and desist” as the title. At other times the phrase will be in the content of the letter.
Either way, it’s important not to ignore it. Ignoring it will often leave the sender with filing a lawsuit as the only option. If they are successful, you could be held liable for damages suffered by the complainant.
The first thing to do when you receive an employment cease and desist letter is to have your lawyer review the letter. Second, they will initiate correspondence on your behalf.
Depending on the strength of the case made by the sender, your lawyer can advise you to seek an amicable resolution to the problem, including ceasing engagement with the new employer or employee. If your lawyer deems the potential lawsuit as lacking merit, they will advise you accordingly.
