Executive-Level Non-Compete Breach Identified Through Pre-Employment Background Check

HR Risk Mitigation on-boarded a new client that was hesitant because our fees were higher than their previous provider.  For their first assignment, the client wanted a potential CEO candidate vetted.

Although the candidate had a common name, using our unique and proprietary research methodology, HR Risk Mitigation identified a lawsuit filed against the candidate.  Furthermore, the lawsuit was filed in a jurisdiction not associated with the candidate and not routinely searched by other background check firms.

One of the CEO’s previous employers sued him, accusing him of violating the non-compete portion of his employment agreement.  The litigation alleged he used confidential relationships and industry contacts cultivated during his leadership at his former employer, in addition to sharing strategic acquisition intelligence. These actions demonstrated potential breaches of fiduciary duty and loyalty.  The case was open and of particular importance to the client, who remarked their previous provider would likely not have identified the lawsuit – adding that the additional cost was well worth the value.

For organizations recruiting executive leadership, litigation history may present evidence demonstrating misconduct or violation of fiduciary duties — potentially creating future legal exposure risk, reputational damage, or stakeholder scrutiny.

Our Commitment:

HR Risk Mitigation understands the heightened governance, compliance and reputational risks associated with executive-level hiring.  Protecting our clients through accurate, defensible, and compliant reporting is central to our mission – delivering value that sets us apart from other providers.