The transfer of employees from one legal entity to another may integrate, at the occurrence of specific conditions, a case of unfair competition as provided for in article 2598 n. 3 of the Italian Civil Code which provides that "acts of unfair competition are committed by anyone who: (...) 3) uses directly or indirectly any other means not in accordance with the principles of professional fairness and suitable to damage the other company”.
Specifically, this refers to conducts that do not comply with professional integrity or dignity of the profession and are aimed at the illegitimate appropriation of a competitor’s market space and/or clients. A prerequisite for the offence is in fact necessarily the existence of a situation of competition between two or more entrepreneurs, deriving from the simultaneous exercise of the same industrial or commercial activity in a territorial area that is even only potentially common and a connected potential commonality of clients.
In order to clarify when there is a real risk of integrating a case of unfair competition and distinguish it from its physiological phenomenon, it becomes crucial to identify the boundary, often blurred, between a simple act of hiring, even multiple, of employees of third parties, falling in general in the free entrepreneurial initiative and a real act of transfer of employees to be considered as an act of unfair competition which gives rise to civil liability.
In this regard, some relevant judgments on the merit have clarified that "the transfer of employees from one company to another does not constitute in itself an act of unfair competition under article 2598 n. 3 of the Italian Civil Code. ...but becomes unlawful when it is accompanied by a series of elements - such as the number of employees transferred, their professional competence, the role they played in the transferred company - which highlight the unlawfulness of the conduct of the transferring company, which takes advantage in a parasitic way of the training investments made by the transferred company on its employees transferred" (Court of Turin, February 4, 2009 and inter alia Court of Milan, specialized business section February 26, 2018) and also that "in terms of unfair competition for diversion of customers the unlawfulness of conduct must not be sought episodically, but must be inferred from the tendential qualification of the acts put in place to damage the competitor, or to systematically take advantage of its goodwill in the market)" (Court of Cassation n. 12681/07, Court of Milan, February 1, 2022 and also Court of Milan, March 22, 2019).
In the light of these principles, the same case-law has therefore identified some significant indicators of the transfer of employees specifying that, by way of example, such case of unfair competition is integrated when the disloyal competitor acts:
- in violation of labor law regulations (for example, as regards the notice periods) and of the other absolute rights of the competitor (such as reputation and intangible property rights and confidential information);
- in ways that are not physiological, as they are potentially risky for the business continuity of the entrepreneur who suffers the trasnfer in his competitive ability, taking into account, on the one hand, the normal dynamics of the labor market in a specific economic context and, on the other, the internal conditions of the loyal company (for example, it has been held that, in cases of business crisis or situations of difficulty, the breaking up of the workforce and the increased outflow of employees are to be considered a physiological effect);
- with methods that have a shock effect on the ordinary activity of offering goods or services of the transferred company and that potentially jeopardize the business continuity of the entrepreneur in its competitive capacity, or cause alterations beyond the threshold of what can be reasonably foreseen and therefore not susceptible of being absorbed through an adequate reorganization of the company.
The material conducts described above must also be carried out with the so-called animus nocendi, to be understood as a will, that cannot be justified in relation to the principles of professional correctness and suitable to create distorting effects in the market and to cause damage or destroy the competitor: in other words, the transfer of employees is only forbidden if implemented with the precise intention of damaging the competing company, which can, however, be assessed presumptively in the light of a series of objective indicators, identified by case-law in the quantity and quality of the transferred personnel, in its position within the transferred company, in the difficulty that can be linked to its replacement and in the methods that may have been adopted to persuade employees to transfer to the transferring company.
Only when all the abovementioned requirements are met and proven, at least in an indicative and presumptive manner, the case of transfer of employees will be configured and the author of such unfair competition act may be called upon to compensate the damage, often significant, suffered by the transferred competitor.