Published on August 23rd, 2016 by Alan L. Sklover
Non-Solicitation in the Petrochemical Industry
Effective This Week: Another client is free from the “chains” of a non-compete or non-solicitation restriction. Here’s what happened:
The Case: Our client, a commissioned salesperson in the petrochemical industry in the Southwest, was quite dissatisfied by a sharp reduction in his sales commission plan, put into effect with little notice, after the company changed hands to a Private Equity group. Almost immediately, compensation programs, benefits and even paid vacations and sick days were cut back. He decided to attempt to leave, and had several offers in no time. Problem was, he was restricted by a non-solicit agreement, and feared getting himself, and a new employer, into a lawsuit.
Having signed a very broad non-solicitation agreement upon hire, our client was precluded from working for another company and for that company soliciting the business for any of his present employer’s customers for a period of 12 months. It applied to him if he ever left his employer, whether voluntarily or involuntarily. The new owners of his employer thought they had him “in chains,” and so could reduce any and all compensation and benefits they chose.
The Negotiation: There are typically three elements in the analysis of a non-compete agreement or non-solicitation agreement: together they spell “C.A.T.” They are (a) Companies (or Clients) that cannot be served, solicited or sold to, (b) the specific Activities that cannot be engaged in, and (c) the Time that the restriction lasts. A rather grueling negotiation, over some four months, centering around the Companies whose business our client could not solicit, and the Time periods of those restrictions.
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The Leverage: We were able to identify and use to the client’s best advantage his 25-year-long and very positive working relations with two client companies of great concern, both of whom suggested – since they had a strong relation with our client and none with the new management – that they would likely stop doing business altogether with his existing employer if our client was not permitted to leave with most of his freedom.
The Result: A six-month-long restriction on soliciting customers who were of no significance to our client, a 60 day restriction on soliciting companies of great significance to him, and no restriction whatsoever on the two companies he had strong relations with. A win-win, at least for our client. It is a result that enabled our client to make the move he wanted to, without any concern for litigation, free from the harsh limits set on his compensation and benefits imposed, foolishly in our mind, by the new Private Equity owners.
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Another “Chain” Broken.
If you have a “chain” around your freedom and future, don’t fret . . . negotiate. Fear is what makes non-compete and non-solicitation agreements work. Just as you best “fight fire with fire,” so, too, can you “fight fear with fear.”
P.S.: If you would like to speak with me directly about this or other workplace-related subjects, I am available for 30-minute, 60-minute, or 120-minute telephone consultations. (Even 5-minute “Just One Question” calls). Just [click here.] Evenings and weekends can be accommodated.
© 2016 Alan L. Sklover. All Rights Reserved.