Can taking over clients constitute an act of unfair competition?

Contemporary entrepreneurs compete on the market for both the client and the employee. Especially in niche industries, which are characterised by far-reaching specialisation e.g. in production, employing employees with appropriate know-how and experience can provide a competitive advantage. The described situation motivates entrepreneurs not only to give the best job offers, but sometimes also to undertake actions aiming at taking over employees of competitors. Despite the fact that competition on labour market is a desirable phenomenon in the free market economy, not every recruitment by a competitor may be considered lawful.

Article 12 section 1 of the Act on combating unfair competition prohibits the inducement of a person working for the entrepreneur to non-performance or improper performance of employee duties or other contractual obligations, in order to benefit himself or third party or to harm the entrepreneur.

It is widely believed that this provision protects internal relations of the entrepreneur with his employees against unfair interference from broadly understood third party and thus not only against actions of direct competitors. However, due to the fact that the possibility of ending cooperation with an entrepreneur and taking up employment with another entrepreneur is the employee’s right, setting the boundary between honest and dishonest employees may raise legal doubts.

For the application of article 12 s. 1 of the Act on combating unfair competition it is necessary to determine that an employee ended cooperation with the current employer due to the third party influence. Therefore, an activity that is solely an expression of the sovereign decision of an employee cannot be considered an act of unfair competition.

Application of the analysed provision should be limited to situations in which a third party in order to exert pressure on an employee uses unfair methods (such as stumbling, fraud, misrepresentation) or its operation under given circumstances otherwise violate good practices (e.g. using confidential information acquired during the performance of work for the benefit of the current employer).

In order to determine that the act of unfair competition has been committed, it is necessary to examine all circumstances of the case in question. The mere submission of a competitive offer to an employee of another entrepreneur does not constitute an unfair incurring to non-performance, improper performance or terminating a contract with an existing employer.

• Judgment of the Court of Appeal in Katowice of 30 May 2017

• Judgment of the Court of Appeal in Białystok of 12 December 2014

• Judgment of the Court of Appeal in Krakow of 15 November 2012