Poaching employees: when hiring a competitor's staff becomes unfair competition.

Trying to attract qualified professionals working for a competing company is entirely normal practice in the labour market. Businesses compete on human resources too, and employees are free to weigh up growth opportunities with other employers. This natural exchange of skills can, however, in some cases cross into genuine unlawful conduct: employee poaching (storno di dipendenti), a form of unfair competition that exposes the "poaching" company to civil liability.

Understanding where the line falls between free competition in the labour market and unlawful conduct is essential for any business running active recruitment strategies, especially in highly specialised sectors where competition for talent is fiercest.

The legal basis: Article 2598 of the Civil Code.

Employee poaching is grounded in Article 2598, first paragraph, No. 3, of the Italian Civil Code, the general provision that prohibits a company from conducting its business in a manner "not in keeping with the principles of professional fairness" and liable to harm a competitor. Hiring another company's staff falls, in principle, within ordinary business activity: it becomes unlawful only when the manner in which it takes place breaches those principles of fairness.

The guiding principle: freedom of economic initiative and freedom of employment.

Before examining the indicators of unlawfulness, it is worth clarifying a fundamental point: simply hiring staff from a competitor does not, in itself, constitute an unlawful act. This principle flows directly from two constitutional guarantees.

• 01Freedom of economic initiative (Article 41 of the Italian Constitution), which allows every business to adopt the growth strategies and recruitment techniques it considers most effective to compete in the market.
• 02Freedom of movement of labour (Article 4 of the Italian Constitution), which guarantees every employee the right to resign and take up a new position with a competing business, subject to any validly agreed non-compete covenant.

The real dividing line between lawful staff acquisition and unfair competition is therefore the so-called animus nocendi: the intent to harm the competing business.

Animus nocendi: an objective, not a psychological, element.

One aspect that often causes confusion concerns the nature of animus nocendi. Contrary to what the name might suggest, case law does not interpret it as a state of mind to be proven inside the entrepreneur's head, but as an objective condition, inferable from a series of concrete indicators emerging from the analysis of the specific case.

The intent to harm is deemed to exist where the overall circumstances show that:

• 01the company that suffered the poaching sees its business continuity and competitive capacity put at risk, undergoing an organisational shock it cannot absorb through adequate internal reorganisation;
• 02the poaching company, through the transfer of employees, appropriates their know-how and the technical, administrative and market knowledge built up at the competitor, wiping out its investment and generating an unfair competitive advantage.

The presumptive indicators identified by case law.

To establish in practice whether unlawful poaching has occurred, courts - in particular the Milan Court, which has developed well-settled case law on the subject, most recently in Judgment No. 73 of 10 January 2022 - refer to a set of indicators to be assessed jointly.

1. The number of employees poached relative to the company's structure.

What matters is not the absolute number but its relative weight against the affected company's organisational chart. It must be assessed whether the poaching had an impact greater than the market's normal turnover dynamics, also in relation to the specific business units involved. In some cases, courts have found unlawful conduct where poaching affected a very significant share of the workforce of a department or of the entire company, especially where the employees involved were difficult to replace.

2. The time frame of the transfer.

Time alone has neutral evidential value: hiring staggered over time is normal. But where several employees move within a very short time frame, and this combines with the technical or commercial importance of the profiles involved, the time factor takes on independent and significant evidential weight.

3. The manner in which the transfer took place.

This is probably the most delicate indicator. The following are considered lawful methods:

• 01hiring through an ordinary job advertisement;
• 02an unsolicited application from the employee;
• 03first contact initiated by the employee themselves;
• 04voluntary and independent resignation, or a decision not to renew an expiring contract.

By contrast, systematic solicitation by the competitor, the use of underhand or improper means, or disparaging conduct towards the original employer are indicators of unlawful conduct. Interestingly, some rulings hold that it is not even necessary to prove specific pressure exerted by the new employer: if the overall body of evidence, formed by the other elements, points unequivocally to unfair conduct, the unlawful act may be found regardless.

4. The role and seniority of the employees involved.

The position held, the strategic role within the organisation, professional qualifications and the specific usefulness of the poached employees are further elements courts weigh in determining whether the transfer actually compromised the competitor's operational and competitive capacity.

The Supreme Court's synthesis.

The Supreme Court (Corte di Cassazione), in Order No. 22625 of 19 July 2022, offered a systematic restatement of settled case law on the matter, clarifying that unfair competition through employee poaching arises when the act of drawing away a competitor's human resources is carried out in a manner that cannot be justified in the light of the principles of professional fairness - unless one assumes an intent, on the part of the poaching company, to traumatically disrupt the competitor's organisational efficiency and thereby secure an unfair competitive advantage.

Practical implications for businesses.

This framework offers some useful operational guidance both for those hiring and for those at risk of losing staff. Companies that are hiring should:

• 01avoid targeted recruitment campaigns concentrated on a large number of employees from the same competitor within a short time frame;
• 02refrain from systematic or persistent contact with other companies' staff, and from disparaging conduct towards their previous employer;
• 03favour transparent selection channels (public job postings, unsolicited applications) and give weight to the candidate's own independent initiative.

Companies at risk of losing staff should:

• 01monitor staff departure patterns, particularly in strategic departments;
• 02consider, where appropriate, introducing non-compete covenants for key roles, within the limits set by law;
• 03document any circumstantial evidence (timing, method of contact, role of the employees involved) that may be useful for a future legal action.

Conclusion.

The underlying principle remains clear: free competition always prevails. Businesses can and must compete to attract the best talent, and employees remain free to seize new professional opportunities. Recruiting another company's staff becomes an unlawful act of unfair competition only when, by number, timing, manner and the role of the employees involved, it takes on anomalous features incompatible with the healthy dynamics of a genuinely free and competitive market.

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