What To Do When Your Sales Manager Asks: “Can we hire this guy, he has a non-compete with a competitor?”

I frequently get forwarded emails by the in-house lawyers for my clients that they received, in turn, from a sales manager in their organization. The emails often go something like this:

We want to hire [SALES REP] who works for [CURRENT EMPLOYER]. He has a non-compete agreement with [CURRENT EMPLOYER]. We are going to hire him for a different position though. OK to move forward?



PS: I need an answer by the end of the day today.

What to do? You don’t need to read a blog to know that the non-compete agreement the sales representative signed with his current employer must be reviewed and analyzed. But what else should in-house counsel do to avoid the uncomfortable moment down the line, after the sales representative has been hired and both he and the company have been sued, when the General Counsel asks: “What did we do on the front-end to try to prevent this situation from happening?” Here are a few tips:

  1. Cross-Examine the Sales Manager. In-house counsel really needs to drill down to determine what exactly the new hire will be doing for the organization, in which territory, and/or with respect to which customers. Sales Managers and others in the sales organization are not focused on the nuances of the restrictive covenants, and understandably so, since their jobs involve driving sales. Knowing exactly what the new hire will be doing – and speaking with and asking the hard questions to others in the organization as well – goes a long way toward avoiding surprises down the road when the Sales Manager is actually being cross-examined by the lawyer for the former employer.
  2. Know Thyself. A company is like a team. Some employees are team players. Others are not. Knowing whether the Sales Manager who wants to make the hire is a team player or not helps answer questions like: Who else in the sales organization should I consult? Do I need to alert my boss? Should the company engage outside counsel?
  3. Double-Check Your Work. I’m a big believer that the best decisions are made when at least one other attorney has considered the circumstances and has weighed in on the “right” decision. It doesn’t need to be a lawyer outside of the company either. Running the facts by a lawyer for another business unit in the company, or a trusted colleague responsible for a different area of practice, is always a good idea before answering the Sales Manager’s question.

© 2009- Duane Morris LLP. Duane Morris is a registered service mark of Duane Morris LLP.

The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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