Here are 25 million reasons to be careful when poaching your competitor's key employees.In a recent federal case, medical device company Cynosure snagged a $25M jury verdict after its rival, Reveal Lasers, and two former sales managers were found to have violated noncompete, nonsolicitation, and nondisclosure agreements.
The result? A hefty price tag for raiding Cynosure's sales and marketing teams.
Cases like this highlight the risks companies face when engaging in "raiding" or "lift outs," where a competitor intentionally poaches a team. These actions can lead to dangerous legal claims, including:
🔹 Tortious interference – Raiding another company's workforce or clients can trigger claims of interference with contractual relationships.
🔹 Trade secret theft – If proprietary information is taken, it can lead to serious consequences.
🔹 Unfair competition – Raiding can also spark claims of unfair competition or even conspiracy.
The lesson here? Employers, tread carefully when hiring from your competitor. Confirm the nonexistence or enforceability of restrictive covenants agreements. Instruct, in writing, that hires are not to bring any of their former employer’s information or property with them. Noncompetes, nonsolicits, and trade secrets can cost you millions (literally).