How to Safeguard Your Business When Hiring Rival Talent

On Mar 11, 2026

In many industries right now, businesses are fighting not just for clients, customers and market share, but to attract and retain good talent.

If you’ve managed to recruit an employee from a competitor, congrats. But before you put together the onboarding package and schedule the welcome lunch, there are potential risks to be aware of, which may impact your strategy in the hiring process or make you decide to go with a different candidate altogether.

Employees owe their current (and soon-to-be former) employers a number of duties that are outlined in their contracts, based on common law or the fiduciary nature of their position. If any of these duties are breached, it could result in expensive litigation, a damage award and paying the other side’s legal fees for the employee, hiring employer or both. What’s more, if any of these duties are even perceived to be breached, you could still end up defending expensive litigation. So, not only should actual breaches be avoided but also anything that could appear to be a breach from the outside.

Contractual Commitments
Is the candidate subject to an enforceable restrictive covenant in their contract with their current employer?

This could take the form of a non-solicitation clause, which limits the employee’s ability to solicit clients/employees of their current employer for a certain period after they leave. If you are hiring a particular candidate because of their business connections, current clients or strong relationships with other high-value employees, you should find out if they are currently subject to this clause. In that case, the candidate’s ability to bring clients or employees with them when they leave, and for a designated amount of time thereafter, would be severely limited. As well, if any employees or clients of the current employer do switch over to your business shortly, this could have the appearance of breaching the non-solicitation obligation and could result in receiving a cease and desist letter or, ultimately, a statement of claim.

A candidate’s contract could also contain a non-compete clause, which limits their ability to compete with the employer or work in a competitive business for a specified amount of time and in a particular geographic location. If a candidate’s contract contains an enforceable non-compete clause, working with your company at all could constitute a breach of contract. In Ontario, however, non-compete clauses are now prohibited under the Employment Standards Act, except for executive employees or in the case of a sale of a business.

Additionally, employees may be subject to confidentiality or non-disclosure agreements that could limit their ability to disclose certain information gained while working for their former employer.

Common Law Duties
Regardless of any specific clauses contained in the employment contract, all departing employees have a duty not to disclose their former employer’s trade secrets or confidential information.

Another important consideration is whether the employee is a fiduciary of their current employer, which means they owe their employer certain elevated obligations beyond those of a normal employee. Fiduciary employees can include directors, officers, senior managers and other key team members. Even without specific contractual provisions, fiduciary employees owe their employers duties of good faith and loyalty, confidence, non-solicitation and non-competition during and after their employment.

Notice of Resignation
Whether there is a specific timeframe included in their contract or not, employees have a duty to provide notice of resignation to their employer. In some provinces, this length of time is determined by statute or it can be outlined in the employment contract. If the resignation notice period is not set out in either, employees must still provide reasonable resignation notice. Depending on the employee’s role and level of responsibility, the required notice could be quite lengthy, so this is something to ask the candidate about and keep in mind, particularly if you require them to start at a certain time.

Preventing Problems and Mitigating Risks
To ensure a smooth transition when hiring from competitors (and avoid any potential legal headaches), follow these seven proactive steps.

Ask candidates whether they are subject to any restrictive covenants or other post-employment restrictions with their current employer.
A candidate who has worked for a competitor will likely have valuable information regarding the competitor’s business, strategies, customers, and so on. While it may be tempting to try to get the inside scoop, employers should refrain from asking about or accepting information from the candidate about their current employer.
When making an offer of employment, ask the candidate to confirm they have not taken any of their former employer’s confidential information or trade secrets, and they will not use any confidential information from former employers in the course of their employment.
Once a candidate has accepted an offer of employment, encourage them to provide written notice of their resignation to their employer as soon as possible and to cooperate in the transition process.
If the candidate is bringing clients or co-workers with them, ensure they were not solicited (or appear to be solicited) in breach of any restrictive covenants.
Discourage the candidate from soliciting their co-workers and avoid active solicitation of other employees of the same company. If another employee of the same competitor applies for a job, ensure to document in detail how that candidate came to apply to the job posting.
Use general best practices as you would in any potentially contentious workplace situation. Keep everything as transparent and above board as possible, and document all steps taken and communications with relevant parties, written with the eyes of an adjudicator in mind.

Lexa Cutler is a labour and employment lawyer at SpringLaw, where she advises and represents both employers and employees in all aspects of workplace law. She has experience problem-solving and litigating a wide range of workplace issues relating to human rights, wrongful dismissals, health and safety issues, Workplace Safety and Insurance Board matters, and grievance and policy arbitrations. Lexa can be reached at lcutler@springlaw.ca