Legal Memorandum: Employment at Will Doctrine in NY

Issue: Under New York law, does an employer have a cause of action against a party who hires away an employee?

New York generally does not permit a claim arising from a third party’s “raiding” employees and hiring them away from their employer.  Inducing another’s at-will employees “is not actionable, at least unless the purpose of the actor was solely to produce damage, or unless the means employed were dishonest or unfair.”  Coleman & Morris v. Pisciotta, 279 A.D. 656, 107 N.Y.S.2d 715, 716 (2d Dep’t 1951); see also Anchor Alloys, Inc., 39 A.D.2d at 508, 336 N.Y.S.2d at 949.  The basis for this rule is the employment at will doctrine.  “Because both the employees and the employers are free to terminate the employment relationship at any time then, a fortiori, a competitor is free to negotiate and hire away the employees at will of his competitor.”  Flagstaff Foodservice Corp. v. Consolidated Foods Corp. (In re Flagstaff Foodservice Corp.), 25 B.R. 844, 842 (Bankr. S.D.N.Y. 1982).

The exceptions to the general rule are narrow.  A claim might be stated if the means to hire the employee were dishonest, or the solicitation was in furtherance of a scheme designed to damage the employer.  Headquarters Buick-Nissan, Inc. v. Michael Oldsmobile, 149 A.D.2d 302, 304, 539 N.Y.S.2d 355, 357 (1st Dep’t 1989).  In Headquarters Buick-Nissan, the employees who had been solicited to work for the defendant dealership had worked for the defendant before they worked for the plaintiff, and when the person whom they followed there returned to the defendant, they followed as well.  Thus, […]