In a competitive market, protecting your workforce is just as important as protecting your customers or intellectual property. When a competitor starts aggressively targeting your employees, it can disrupt operations, drain morale, and compromise proprietary knowledge. While some employee turnover is natural, illegal employee poaching and tortious interference with employment contracts cross a legal line.
At Hone Law, our Las Vegas business litigation attorneys help companies identify unfair competition, defend their workforce, and pursue appropriate legal action. Here are five red flags that a competitor may unlawfully target your team and what you can do to fight back.
What Counts as Unlawful Employee Poaching?
Not all hiring from a competitor is illegal. However, when a company uses deceptive, coercive, or inside tactics to lure away your talent, especially in violation of contracts or confidentiality agreements, it can rise to employee raiding, trade secret misappropriation, or tortious interference under Nevada law.
1. You Notice a Sudden Cluster of Employee Departures
If several employees leave within a short period, particularly from the same department or leadership level, and take positions with the same competitor, it could suggest organized employee poaching. Watch for patterns and timing: Is there a connection to a recently departed executive or partner? Are new hires being drawn from sensitive or revenue-generating units?
Coordinated Departures May Indicate Unfair Competition
Competitors may be using insider knowledge or ex-employees to raid your workforce, which may be unlawful if done in bad faith or through improper means.
2. Departing Employees Access or Take Confidential Data
Did an employee download files before quitting? Email sensitive information to a personal address? If so, your company may be at risk of trade secret misappropriation. Client lists, pricing models, proprietary processes, or confidential training materials are protected under Nevada and federal law.
Trade Secret Theft Is a Major Red Flag
If a competitor benefits from that information, even indirectly, you may have grounds for a lawsuit under the Defend Trade Secrets Act (DTSA).
3. A Competitor Is Recruiting Employees Under Contract
If your employees are bound by non-compete, non-solicitation, or confidentiality agreements, and a competitor is actively recruiting them, they may be intentionally interfering with contractual relationships.
Enforcing Non-Compete or Non-Solicitation Agreements
This is known as tortious interference and is grounds for legal action if done willfully. Even if restrictive covenants are challenged in court, a well-drafted agreement can help prevent poaching and support claims of illegal conduct.
4. Employees Report Coercion or Defamation
Are former or current employees being told negative, false, or misleading things about your company to pressure them into leaving? This could be part of a coordinated effort to discredit your business—and it’s not just unethical; it may be considered business defamation or unfair competition under Nevada law.
False Claims or Pressure Tactics May Be Actionable
Such conduct harms your brand and could be used to bolster a claim of intentional interference or employee raiding.
5. A Former Employee Is Actively Recruiting for a Competitor
When a recently departed employee immediately begins recruiting former colleagues, especially using inside knowledge of salaries, weaknesses, or team dynamics, it raises serious concerns.
Misuse of Insider Knowledge
If that individual had access to protected information or violated a duty of loyalty, it could amount to breach of fiduciary duty, misappropriation, or other causes of action. Employers have the right to protect their workforce stability and proprietary strategies.
What To Do If You Suspect Employee Raiding or Interference
If you suspect a competitor is illegally targeting your workforce, act quickly. Waiting could result in more departures, lost clients, and compromised trade secrets.
Step 1: Investigate Internally
Start by examining recent employee activity for any signs of suspicious data access, such as unusual downloads or email forwarding. Look closely at the timing and nature of recent departures. Are they clustered within a specific department or linked to a particular competitor? These patterns may suggest a coordinated effort.
Conduct thorough exit interviews with departing employees and make sure to preserve all relevant digital records. This internal audit can help determine whether illegal poaching, contract breaches, or trade secret violations have occurred and prepare you for the next steps.
Step 2: Issue a Legal Demand or Cease-and-Desist
If the competitor clearly violates contracts or uses protected information, your attorney may issue a cease-and-desist letter. This puts the other party on notice and helps protect your legal rights going forward.
Step 3: Seek Injunctions or Legal Remedies
If the conduct continues or has already caused harm, you may pursue:
- Injunctive relief to prevent further interference
- Monetary damages for business losses or reputational harm
- A temporary restraining order (TRO) to stop use of confidential information
How Hone Law Protects Your Competitive Edge
At Hone Law, we represent companies across Las Vegas and Nevada in high-stakes business torts, including employee raiding, breach of fiduciary duty, and trade secret litigation. We’re strategic, responsive, and unafraid to seek urgent relief when your business is threatened.
Whether you’re drafting enforceable employment contracts or taking action against a competitor’s illegal conduct, our business litigation attorneys can clarify and confidently guide your legal strategy. Call us today at 702-608-3720 or fill out our online contact form for a confidential consultation.