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No-poach employment provisions – are they still acceptable?

On March 20, 2019 by Schnader

Megan E. Harmon published “No-poach employment provisions – are they still acceptable?” in The PIOGA Press (March 2019), the newsletter of the Pennsylvania Independent Oil & Gas Association. Harmon is a partner in Schnader’s Business Services Department, a member of the Firm’s Executive Committee, and co-chair of the Energy & Environmental Practice Group and the Mergers and Acquisitions Practice Group.

She wrote:

“For years, the oil and gas industry, along with other sectors of the economy, has experienced a chronic shortage of qualified labor. In this era of low unemployment and lack of skilled workers with adequate training, employers are understandably protective of their workforce investments.

So when it’s time to add new talent, you will advertise for positions, maybe pay a recruiter, invest in employee training and have ramp-up time before new hires are fully functional―all at significant effort and cost. In order to protect your investment in these employees, you may ask customers to agree to contract provisions prohibiting them from hiring your workers without your consent.

These types of restrictions have become commonplace and are a safe and standard practice, right? Well … maybe not anymore. A recent Pennsylvania court decision, which follows a series of federal litigation and policy actions, should cause employers to consider no-poach employment provisions in a new light. Such matters can be tricky and involve employment and/or antitrust issues, so business leaders should work closely with legal counsel.”

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