legal issues in backdoor hiring

The Thin Line: Understanding Legal Issues In Backdoor Hiring

Wilson Cole

In the ever-evolving landscape of employment and recruitment, the term "backdoor hiring" has become increasingly common. This practice involves companies hiring employees who were originally placed at the company through a third-party agency.

While it might seem straightforward, backdoor hiring often raises significant legal issues and challenges that employers and employees should know.

This blog post will delve into the complexities of backdoor hiring, its potential legal implications, and how employers and employees can navigate this thin line.

Backdoor Hiring: The Basics

Before diving into the legal intricacies, let's clearly understand what backdoor hiring entails. Backdoor hiring typically occurs when a company hires an employee currently working for them but was initially placed there by a staffing agency or a consultancy.

This usually happens when the company converts the temporary or contract employee into a full-time, permanent staff member.

While it might seem logical and cost-effective for the company, various legal concerns arise during this process.

Legal Issues in Backdoor Hiring

  • Non-Compete Agreements: Many staffing agencies and consultancies require employees to sign non-compete agreements that prevent them from working directly for the client company after the contract ends. If the employee is hired backdoor, it may be seen as a breach of this agreement.
  • Contractual Obligations: The terms and conditions of employment and the contract signed with the staffing agency are crucial. 
  • Intellectual Property and Trade Secrets: If the employee gained access to sensitive information or trade secrets while working for the staffing agency, hiring them back door may raise concerns about protecting intellectual property. 
  • Discrimination Issues: Discrimination claims can also arise during backdoor hiring if it is perceived that the company is selectively hiring specific individuals and discriminating against others. 
  • Employee Benefits and Protections: Employees may lose certain benefits or protections while working through a staffing agency, such as workers' compensation or unemployment benefits. 
  • Termination and Severance: When hiring an employee backdoor, the process for termination and any applicable severance pay may differ from standard employee contracts. 

How to Navigate the Legal Minefield

Given these potential legal issues, employers and employees must carefully navigate the thin line of backdoor hiring. Here are some key steps to consider:

  • Review Contracts: Thoroughly review any existing contracts with staffing agencies or consultancies and understand the terms and conditions regarding hiring contract employees.
  • Consult Legal Counsel: It's advisable to consult with legal counsel to ensure compliance with all relevant laws and regulations. They can help you navigate any potential legal pitfalls.
  • Communicate Transparently: Maintain open and transparent communication with the employee being hired back. Ensure they understand the change in their employment status and address any concerns they may have.
  • Offer Comparable Benefits: Make sure the employee will receive benefits and protections that are at least equivalent to what they had as a contract employee, and inform them of these changes.
  • Protect Intellectual Property: Implement safeguards to protect intellectual property and sensitive information from the previous employment arrangement.


Finding yourself in the middle of a difficult legal situation surrounding backdoor hiring can be daunting, but understanding the core laws associated with the topic can help you avoid any legal trouble, no matter your path.

Though errors may sometimes occur, online research and consulting a professional lawyer specializing in hiring law can help protect you from falling into potential legal traps. Therefore, it's important that you pay attention to all legal implications and consistently stay up-to-date on the most current hiring regulations and practices.

With open dialogue, communication, research, and seeking guidance when necessary, you are sure to stay one step ahead of any troubles that could arise in the future relating to backdoor hiring.

Wilson Cole

Wilson Cole

Founder and CEO of Adams, Evens & Ross NC, LLC, the nation's largest credit and collection agency designed exclusively for the staffing and recruiting industry. In 2008, he was inducted into Inc. magazine's, "Inc. 500" as CEO of Adams, Evens & Ross NC, LLC, the 307th fastest-growing privately-held company in America. This exclusive group of other Inc. 500 CEOs includes; Bill Gates of Microsoft and Larry Ellison of Oracle. In 2007, Recruiting & Staffing Solutions Magazine named him "The Billion Dollar Man", based on successful collections of more than 1 Billion dollars in past due debt. With a career spanning 30 years as CEO of Adams, Evens & Ross NC, LLC, he's in the business of getting clients paid.