Restrictions to Consider Archives

Non-Solicitation Does NOT Mean Non-Communication

Published on May 25th, 2016 by Alan L. Sklover

Keep in Touch with Clients During Non-Solicit Periods

“ Make new friends but keep the old.
One is silver and the other gold.”

– Traditional Girl Scout Song

ACTUAL CASE HISTORIES: In recent years, there has been an undeniable increase in the number of employees, worldwide, who are required to sign “non-competition” agreements by their employers. Recently, though, “non-compete’s” are facing greater scrutiny and skepticism than ever before among many Judges, as non-compete agreements frequently entail keeping a working person – and probably a person supporting a family – out of work without a really good reason. Thus, employers and their lawyers are finding the enforceability of non-compete agreements less and less certain as time goes on.

As a result, with the same goal in mind – not losing clients and customers when an employee leaves – many employers are changing tactics. The increasingly popular tactic is to use “non-solicitation” agreements, instead, which permit employees to work for any employer of their choice, but requires them to refrain from “soliciting” business from the former employer’s customers and clients for a period of time, commonly from three months to 24 months. These are finding a more hospitable response from Judges when they are asked to rule on their enforceability.

Judges are far more likely to enforce non-solicitation agreements because they do not mandate the employee’s inability to work in their field of endeavor, but merely avoiding going after the business of the employer’s clients.

Like any other restrictive agreement, employees must abide by the terms of their non-solicitation agreements. That said, we have found, that many of our clients have not only avoided “soliciting” business from their former employers’ clients, but have also avoided any contact or communications with them whatsoever, which is entirely unnecessary and often quite self-defeating.

Out of a gut-level – and irrational – fear, many employees completely shut down their communications with their former customers and clients, without good reason, and by doing so decrease the chances that, after the non-solicitation period has expired, they can promptly resume the business relation previously enjoyed, as well as the fruits of it.

Don’t unnecessarily limit yourself. Maintain your valuable and hard-won client relations while under the restrictions of a non-solicitation; just don’t solicit. It’s that simple.

LESSON TO LEARN: Here is the text of a commonly worded non-solicitation agreement:

    “Employee agrees that during his or her employment by the Company and for a period of one (1) year after Employee has ceased to be employed by the Company for any reason, Employee shall not, without the prior written consent of the Company, directly or directly solicit, divert or take away, or attempt to divert or take away, the business or patronage of, the Company’s clients, customers, or accounts, or active or prospective clients, customers, or accounts.”

While it may sound confusing, it is easier analyzed if you simply “parse” it – which means cut it up into “bite-sized pieces.” As an experienced employment lawyer, all I see is (1) one year, (2) will not in any way, (3) try to solicit or take away, (4) business, from (5) the company’s clients and prospective clients. Does it say “Stop all communications with customers and prospective customers? No, nothing like that . . . so long as the communications do not “seek to solicit or divert business.”

That distinction is an important one, because the business and personal relations you may have established in dealing with customers and clients are a good part of your value in your field. Those relations do not have to be “ended cold,” but can be “kept warm” until the non-solicitation period of time is over.

Having signed a non-solicitation agreement does NOT mean that you cannot communicate with your employer’s clients. Nor does it mean cannot maintain your personal relations with your former employer’s clients. And, too, it does not mean you cannot plan to solicit their business. It just means that you cannot directly or indirectly “solicit” them or their business.

Far too many people who are under non-solicitation restrictions unnecessarily limit their activities and communications, and in doing so unnecessarily limit their career success, after signing a non-solicitation agreement

If the non-solicitation agreement you signed is worded like the one above, written only with “solicitation” in mind, then you are free to do everything else. So long as you do it very carefully, it may be very much in your interests when later – after the non-solicitation period has expired –
soliciting their business.

Life is hard enough. Don’t defeat yourself. Do keep in touch with the clients of your former employer. By continually keeping in touch you only increase your chances of them becoming your clients when “the coast is clear.”

WHAT YOU CAN DO: If you have signed a non-solicitation agreement, bear these thoughts in mind, and don’t shortchange yourself:
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“Non-Solicitation Agreements – Ten Practical Questions”

Published on February 2nd, 2016 by Alan L. Sklover

Question: Dear Alan: I was laid off two weeks ago from my position at a marketing firm. In my severance agreement, there is a “Non-Solicitation” clause that says this:

“I agree that, for six months, I will not, directly or indirectly, solicit, contact, or identify any of the Firm’s clients or prospective clients on behalf of any person or company.”

I have decided to open up my own marketing firm and have several questions for you. Can you please answer them. Thank you

Erica
Cheyenne, Wyoming

Answer: Dear Erica: Here are my answers to your questions:
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“Can I be sued for poaching an employee from my former employer?”

Published on January 26th, 2016 by Alan L. Sklover

Question: Three months ago I took a new position in my industry. I have now been given the formal approval to assemble a team of my own. I know of a colleague who works for my former employer, who would be a most favourable addition to my team.

Might I be sued for poaching an employee from my former employer?

Brijesh
Stanmore,
Greater London, UK

Answer: Dear Brijesh: I am not entirely familiar with English law on this subject, but arranged to have a colleague in London review my thoughts, which I am told are applicable in the UK, just as they are in the U.S. Here they are:
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“No Non-compete? No Stolen Secrets? You are Free.”

Published on August 26th, 2015 by Alan L. Sklover

Question: My husband was recently fired from his job. He never signed a non-compete or a non-solicitation agreement. We decided to start our own business in the same kind of business as his employer was in, because that is what my husband knows best. I own it; he does most of the work. No client list was ever taken or anything like that.

Since we started the business, we gained some of the clients of his former employer. Are we doing anything wrong or illegal? We have not heard from his former boss, but we are concerned that we will.

Teresa
Ogden, Utah

Answer: Dear Teresa: Simply put, and legally speaking, you seem to be “in the clear.”
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“Before leaving my job to open my own business, can I contact the clients to let them know?”

Published on October 17th, 2010 by Alan L Sklover

Question: Hi, Alan. I am a dog groomer, and have been working for my employer for four years. I suffer daily from harassment on the job, so I’ve decided to go into my own business.

I am thinking of telling the clients (the owners, of course, not the dogs) that I will be leaving soon, and giving them my new contact information.

Is that legal? 

         Connie
         Bangor, Maine

Answer: Hi, Connie. Unfortunately, what you are contemplating doing is not illegal – that is, it can’t get you arrested –  but it is a violation of your legal duty to your employer that is “implied” in the law, which means it could get you sued by your present employer. 

While you are an employee – up until the very moment you leave – you are supposed to be loyal to your employer. Doing things against your employer’s interests – such as trying to take clients with you – is disloyal. You could get sued for acting against your employer’s interest, while your employer is paying you.

However, the moment after you leave your present employment, you are free to compete with your employer for clients. It is at this time that you can contact the clients, and offer your good services.

Hope this helps. Hope, too, you take “the plunge” into being in your own business. I did that a few decades ago, and I am thrilled that I did so.

Russell Sprout, my Jack Russell Terrier, says, “Woof,” too. He said you will know what he means.     

          Best, Al Sklover

© 2010 Alan L. Sklover, All Rights Reserved.


Alan L. Sklover

Alan L. Sklover

Employment Attorney
and Career Strategist
for over 35 years

Job Security and Career Success now depend on knowing how to navigate and negotiate to gain the most for your skills, time and efforts. Learn the trade secrets and 'uncommon common sense' of Attorney Alan L. Sklover, the leading authority on "Negotiating for Yourself at Work™".

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