Can our employees work for competing companies?

Our company has used an in-house staffing agency for all our temporary staffing needs for a few years. The respective companies have been run as two separate entities until recently. We are considering absorbing their employees (3 full-time) two of which are recruiters. Is there anything illegal about their recruiters recruiting and staffing for other customers besides us?

Rita Risser's response:

It's up to you. Assuming you have a standard Conflict of Interest policy, you could allow them to recruit for others on their own time as long as that work did not interfere with their duty of loyalty to you, their primary employer. But it seems likely that conflicts would develop. For example, imagine that your company and one of their free-lance clients have openings for the same type of job. The recruiters will be paid by you whether or not they fill your position. They get a commission when they fill the position for their other client. Which client will they want to send that recruit to? I would recommend only allowing them to work for other clients if there was no likelihood of such a conflict (e.g., you are in high tech and their other clients are in the restaurant business).

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