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This past weekend, I was fascinated to read Leah Eichler’s story in the Globe and Mail about “Boomerang Employees.” Having never heard the term, I was interested to learn that it refers to an employee who leaves an organization only to later return to that same organization for a second term of employment, presumably after some form of a gap. Eichler cited a study published this summer in Personnel Psychology which shows that “boomerang employees,” or workers who return to a company after leaving voluntarily, can comprise approximately 10-20% of an organization’s new hires. While Eichler talked about the advantages and challenges faced in these situations in terms of fit and culture, this got me to thinking about some of the employment law implications of hiring those she refers to as the “comeback kids”.
- Reference Checks
Given that the employee is known to the organization, the instinct may be not to do a reference check if looking to hire back a “boomerang” employee. This is one of those cases where your lawyer would no doubt tell you that it’s better to be safe than sorry. In most cases, this will probably be unnecessary, but placing a call to the organization where the employee was working during the gap will ensure that there were no specific reasons why the employee is now back knocking at your door. If they were fired for cause from that organization, you may not be as anxious to have them back.
- The Effect of the Gap
When an employee returns to a former employer, a question arises as to whether they join as essentially a new employee for seniority-related purposes or whether their pre-gap service will be counted for these purposes. There are any number of employment-related reasons why this might matter, such as calculating vacation entitlement, waiving benefit entitlement periods, or severance entitlements down the road, to name a few.
It is very important for the employer and the “boomerang” employee to be clear upon re-hiring as to whether or not this prior service will be counted and for this to be clearly reflected in the hiring documents, and ideally an employment contract. When this isn’t addressed, employers are sometimes shocked to learn, say when they try to fire a boomerang employee who has only most recently worked for 2 years, that the employee may actually also be credited with the 12 years of service they had before they left for the purpose of calculating their severance entitlement.
- Probationary periods
When re-hiring a boomerang employee, everyone often assumes that a probationary period is not necessary and they will typically be waived. Again, this may be a “knee-jerk” reaction and we recommend instead considering whether there is anything in the new relationship which would benefit from a “trial period”. Even though the returning employee may not be new to the organization, if they will be working in a different role or with different people, you still may wish to benefit from a period of probation. We have tended to find that employees who are confident that they will pass a probationary period usually do not object to having one.
- Consider Restrictive Covenants and Intellectual Property Implications
Re-hiring an employee can get particularly “muddy” when they work with clients or with intellectual property. Again, the natural tendency may be to simply take back the employee and have them resume work on their previous projects or with their previous clients. However, depending on what work they did during the gap, and even more importantly, what agreements they may have signed either when starting work for the gap employer or when they left, there may now be certain restrictions on their ability to do this same work. Before employing them, you will want to be sure to explore all possible restrictions and contractual obligations they may have.
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As Eichler notes in her article, there are many benefits of re-hiring an employee who is known to the organization. However, instead of jumping right back into the relationship, it is worth taking a little time to consider a new path forward and what protections might be put in place to govern that new relationship. All of these can be captured in a written contract and the certainty often benefits both parties.