Sold Salesman

Q. Can I hire a salesman away from a competitor? 

A. There are many reasons someone might want to hire an employee currently working for a competitor. Some are a lot more ethical than others.

You might want to hire this individual because he has excellent qualifications and you believe he has exactly the skills needed to be a valuable asset to your firm. This scenario is the least problematic, since you are not working against your competition but rather for your own benefit. Even so, there is a certain ethical problem. While you don't owe your competitor a duty of loyalty, you still shouldn't hire away a key employee if you could easily find a suitable individual without raiding his roster. Since you can find someone without damaging the other firm, taking aim particularly at the competitor's staff becomes like gratuitous gutting of his team.

Even when this kind of hire is not unethical, it is worth thinking twice before making such an offer. Sometimes these hires lead to a whole series of raids and counter-raids that can wreak havoc on the involved firms, which may not be in your best interest. Even the employees, who are the supposed beneficiaries of such a hiring war, could find their satisfaction decline due to the disruption of workplace routine. (A similar topic was also discussed in a previous column.)

Sometimes the motivation for such a hire is malicious: the objective is to hire away someone who is critically important to the competition, whether or not I'm really in need of this individual. This would definitely be considered unfair competition. (In some places this is illegal.) Every person has the right to look for the staff that will best suit his workplace, but it's not fair to take a destructive attitude and try to harm other firms.

And when the prospective hire is a sales representative, it is not unusual that the real reason for the hire is to steal the competitor's customers. This is definitely improper. Not only is the customer list confidential, but even if customers move of their own free will, the relationship which this salesperson developed with the competitor's customers was cultivated on behalf of the employer, not for the salesperson individually.

You can try and convince yourself that the customers are coming over because of your superior product and your highly qualified new salesperson, but ask yourself if the salary you're offering the new hire reflects only his ability to attract "new" customers or also signals a down payment on his ability to rope in his current clientele.

In this case, you are not the only one acting unfairly to the competitor. The salesman is also acting improperly, by taking proprietary information with him as he switches jobs. It is unethical to be in the situation of trying to persuade someone to do something that from his own point of view lacks integrity.

A good rule of thumb in these situations is to ask, "Would I make an offer to the same individual, with the same compensation, if this salesperson weren't working for my competitor but rather for some unrelated business?" If the answer is "no," there is good reason to think that the hire may be an instance of unfair competition or of stealing customers.

SOURCES: Shulchan Aruch, Choshen Mishpat 237:2; Pitchei Choshen Sekhirut, 7:(50); Responsa Avnei Nezer Choshen Mishpat 17.