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:
1. First and foremost, carefully read your non-solicitation agreement to see whether other restrictions are “buried” there, because sometimes they are “snuck in.” It can’t be said enough: every word and every punctuation mark of an agreement must be carefully read, and carefully analyzed. Just as I “parsed” the language above, you need to parse the language in your own “non-solicitation” agreement.
Watch especially for words that prohibit your DOING any business with former clients, such as “I will not SERVE or SELL to former clients.” While most non-solicitation agreements prohibit only your actively “reaching out” to former clients and customers, any other language such as “serve or sell to” would mean that the restriction is much broader, making your “non-solicitation” agreement really much more like a non-competition agreement. This, though, is not all that common.
Whether you are prohibited from only “soliciting” or also “selling to and serving,” you can still communicate to maintain the relation until your prohibition period has expired.
2. Purely personal communications to former customers – without any mention of business – are not solicitations of business. Simply put, if communications don’t mention business, and don’t mention solicitation, and they are not from a business address, telephone number or email address, they can’t be solicitation of business. The gist of my suggestion is that “Thank You” and “Merry Christmas” messages, and all sorts of equivalent, “non-soliciting” messages, are not prohibited, but may be valuable to you as they serve to maintain relations “warm.”.
Rather, they can help prepare you to solicit business when your doing so is no longer prohibited. And preparing to solicit business is not solicitation of business.
3. Your first great opportunity to keep your business relations “warm” is to send former clients and customers a personal “Thank You” note, shortly after your departure. This first note is an important one. It can mention you are no longer working with your former employer, but it CAN NOT say where you are now working, or going to be working. Nor can it express that “I want your business in the future.” It CAN and SHOULD express appreciation for all of the kindnesses and courtesies shown while working together.
4. Then, periodically – perhaps each four to six weeks – transmit a new note to each client or customer that no one could claim are “soliciting” or “seeking” business. There are many, many reasons to keep in touch, without “soliciting” business, including among others to say “Congrats on a Promotion,” “Did You See This Great Article?” “Happiest of Holidays,“ etc., etc. You might also seek a job reference if you are not presently working.
Bound by a Non-Solicitation Agreement? Don’t cease communications with clients and customers! Rather, keep their relations “warm” for later use. Our “Seven Brief Model Letters to Maintain Contact with Former Clients and Customers” shows you “What to Say, and How to Say It.™ To obtain your copy, just [click here.] Delivered by Email – Instantly!
5. Each communication should include only your personal contact information, and never any new business address, phone number or email address you may now have. In any communication made during a non-solicitation period, do not use or note any business address, email or website you might use for business. You need to be a bit “paranoid” for any arguments that what you have sent is “solicitation.” So, one major precaution to take is to avoid use or mention of any new business address or contact information, which would imply a solicitation of business.
6. In sending any communication, do not incorporate any “proprietary” information about the person you are writing to. You should not be in possession of any “proprietary” information about the person or company you may be writing to, such as their account number with your former employer, explicit information about their past orders, or their employer tax ID number. Any such information would be quite suggestive that you have taken such information with you when you left your former employer, a major “no no.”
The “test” is this: Is the information you are using available on the internet? If it is, you can use it. If it is not, then how did you come to have it, and use it, in any communication? Do you have to forget everything you know? Of course not, but even if you remember that a certain customer orders 100 bales of hay a week, you should not be using that in any way, at any time, after your employment ends. If you remember and use the fact that someone loves fishing, that is fine, but not his or her social security number. That would be – excuse the pun – very “fishy.”
Here’s another illustration: Sending a “Happy Holidays” is fine; “Happy Birthday” may be suspect.
7. Do not initiate any “spoken” communications. Do yourself a “favor”: Don’t make any phone calls or in-person communications to former clients or customers at this time if you can help it. As there is no record of exactly what transpired during “spoken” communications, you could have a hard time defending yourself if anyone claimed that you solicited business when speaking even if you did not do so. Letters and emails can provide great evidence of (a) who contacted who, (b) what was expressed, (c) what was NOT expressed, (d) how it was expressed, (e) when it was transmitted, and (f) the information shared or not shared in the communication. Every degree of prudence and precaution helps.
8. Don’t be a “pest” but do be a “friend.” Common sense dictates that you don’t want to make yourself a “pest” by sending emails notes, articles and other communications every week. That said, you do want to remind former clients and customers of who you are, what industry you are in, and how good it is to work with you . . . and will be again in at some time in the not-too-distant future.
9. What if the former client or customer calls you, and says, “Can we do business?” This question arises all the time. The answer is – as lawyers are often heard to say – “Well, that depends . . .”
a. If your non-solicitation agreement says only that you cannot “solicit” or “seek,” or words to that effect, but does not say “serve” or “do business with,” or words to that effect, SINCE THEY CALLED YOU, AND YOU DID NOT SOLICIT THEM, then you can say, “Yes, absolutely, let’s do business.” A suggestion, though: ask the former client or customer to email you that question, so you have a record of who called who and what was expressed.
b. If your non-solicitation agreement does include words like “serve” or “do business with,” or words to that effect, you can say, “No, not now. I am restricted from doing business with you until October 14, 2019 (for example), but then, after that date, we are free to do business.” In this case, I suggest you write them an email along these lines, “Per your call to me of yesterday, as I mentioned, I am restricted from doing business with you until October 14, 2019, but after that we may do so.”
10. What if you receive a nasty “Cease and Desist” letter from your former employer’s lawyer alleging a non-solicitation violation? Every now and then, a former employer may come to believe that you may be violating your non-solicitation restriction. If this happens to you, you may get a rather nasty “Cease and Desist” letter from their lawyer alleging that you violated your non-solicitation agreement.
If this happens – provided you have carefully followed the instructions above – consider answering that letter with one of your own, sent Certified Mail, Return Receipt Requested, UPS or FedEx, telling him or her that you have a right to keep in touch with friends and former customers, so long as (1) solicitation does not take place, and (2) business is not sought or solicited, and, thus, you are entirely innocent of any such allegation.
You might challenge him or her, too, to provide you the alleged facts of when, to whom, how and where you “solicited” or “sought” business from a client or customer of your former employer. Those two points raised with “the confidence of the truth” usually resolve the matter.
Received a nasty “Cease and Desist” letter alleging a Non-Solicitation violation? U Use our Model Letter Responding to a Cease & Desist” letter alleging Non-Solicitation Violation. Shows you “What to Say, and How to Say It.™ To obtain your copy, just [click here.] Delivered by Email – Instantly!
If, though, you have transgressed by actually soliciting the business of a former client or customer, while under a non-solicitation restriction, you can consider taking those steps, but in addition, I do suggest that you speak with an experienced employment lawyer for advice on how to best handle the matter.
Business relations are a very important part of your business value. Don’t them wither on the vine, even if you are entangled by a non-solicitation restriction.
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.
SkloverWorkingWisdom™ emphasizes smart negotiating – and navigating – for yourself at work. Negotiation and navigation of work and career issues requires that you think “out of the box,” and build value and avoid risks at every point in your career. We strive to help you understand what is commonly before you – traps and pitfalls, included – and to avoid the likely bumps in the road. For those engaged in compliance efforts, you have more to consider, and more at stake, in your daily efforts.
Always be proactive. Always be creative. Always be persistent. Always be vigilant. And always do what you can to achieve for yourself, your family, and your career. Take all available steps to increase and secure employment “rewards” and eliminate or reduce employment “risks.” During non-solicitation periods, continuing communications with former customers and clients is wise, and acceptable, providing it is done with prudence. Learning the “tricks of the trade” is what SkloverWorkingWisdom™ is all about.
*A note about our Actual Case Histories: In order to preserve client confidences, and protect client identities, we alter certain facts, including the name, age, gender, position, date, geographical location, and industry of our clients. The essential facts, the point illustrated and the lesson to be learned, remain actual.
Please Note: This Email Newsletter is not legal advice, but only an effort to provide generalized information about important topics related to employment and the law. Legal advice can only be rendered after formal retention of counsel, and must take into account the facts and circumstances of a particular case. Those in need of legal advice, counsel or representation should retain competent legal counsel licensed to practice law in their locale.
Sklover Working Wisdom™ is a trademarked newsletter publication of Alan L. Sklover, of Sklover & Company, LLC, a law firm dedicated to the counsel and representation of employees in matters of their employment, compensation and severance. Nothing expressed in this material constitutes legal advice. Please note that Mr. Sklover is admitted to practice in the state of New York, only. When assisting clients in other jurisdictions, he retains the assistance of local counsel and/or obtains permission of local Courts to appear. Copying, use and/or reproduction of this material in any form or media without prior written permission is strictly prohibited. All rights reserved. For further information, contact Sklover & Company, LLC, 45 Rockefeller Plaza, Suite 2000, New York, New York 10111 (212) 757-5000.
Repairing the World,
One Empowered – and Productive – Employee at a Time™
© 2016, Alan L. Sklover All Rights Reserved. Commercial Use Prohibited.