September 5, 2012

Called for Interference — off the Gridiron and in the Board Room

Posted in Application Process, Contracts, Hiring and Recruiting, Interference with Contract, Interference with Prospective Business, Non-Compete Agreements tagged , , , , , , at 8:11 am by Tom Jacobson

It’s that time of year again. The Twins’ dismal season is almost over, the Lynx are enjoying another great run, and we hope that maybe — just maybe — this will be the year the Vikings make the playoffs or the Gophers make it to a bowl game. In the meantime, we’ll have to wait and see if the replacement refs hired by the NFL during the lockout can tell the difference between good pass defense and interference.

The gridiron isn’t the only place where interference can be called, for interference can also be called on the playing field of business. Specifically, if someone improperly interferes with a contract between others, the interfering party can be held liable for the interference. Interference can also be called if someone improperly interferes with the potential business relationship between others.

But like in football, where there is a difference between good pass defense and pass interference, there is a difference between good old-fashioned business competition and wrongful interference. To prove improper interference with a contract, a plaintiff must prove that s/he had a contract with another, that the defendant knew about the contract, that the defendant intentionally caused a breach of the contract without justification, and that the plaintiff suffered damage because of the interference.

For example, if a company hires a great employee who once worked for a competitor, that’s just good old-fashioned competition. But, if that company knowingly hires an employee who should not work there because of a non-compete agreement with a former employer, the former employer may have a valid claim for contractual interference against the new employer.

What you need to know:  As a part of the hiring process, employers should develop a protocol for asking applicants if they are subject to any non-compete agreements, confidentiality agreements, or similar contracts that may restrict their ability to work for the new company.  This is particularly true for executive and management-level hires and all hires in highly competitive and technical industries where non-compete and confidentiality / non-disclosure agreements are relatively common.

Figuring out and playing by the rules in the business play book can be difficult. When you need help understanding or enforcing them, stop in, call, or contact me at taj@alexandriamnlaw.com.

The comments posted in this blog are for general informational purposes only. They are not to be considered as legal advice, and they do not establish an attorney-client relationship. For legal advice regarding your specific situation, please consult your attorney.

Copyright 2012 Swenson Lervick Syverson Trosvig Jacobson Schultz, PA

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