A reader sent in the following question recently in regards to the ramifications of notifying your employer’s customers that you’re leaving to start a similar business:
“For the past several years, I’ve been employed by a local accounting firm and have have developed close relationships with several of the firm’s clients. A number of these clients have been dealing exclusively with me as opposed to the firm’s partners, and I view them (rightly or wrongly) as ‘my’ clients. I’m leaving the firm shortly to set up my own practice in the same town and would like to notify these clients of my change in status, but I’m afraid the firm will sue me for ‘stealing business’. I’ve never signed any sort of noncompete agreement with the firm. What are my legal risks here?”
First of all, no business “owns” its clients or customers. People are free to use whichever service providers they like, and agreements that prevent them from doing so are often viewed as illegal “restraints of trade” and are generally struck down by the courts.
Second of all, as I’m sure you already know, this situation is every employer’s worst nightmare: You spend years training someone in the hopes they’ll help you grow your business, and the next thing you know, they’ve quit and taken half your customers with them.
Shame on this accounting firm for not requiring all its employees to sign a “nonsolicitation” agreement, in which the employees promise not to contact any of the firm’s customers or clients for a period of XX months after leaving the firm’s employ for any reason. Unlike noncompete agreements–which prohibit ex-employees from working in the same field or profession within a certain geographic area–nonsolicitation agreements are viewed as a legitimate effort by a business to protect its goodwill, and are often upheld by the same courts that routinely strike down noncompetes.
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Written by Cliff Ennico on Entreprenuer.com
Cliff Ennico is a syndicated columnist, author and host of the PBS television series MoneyHunt. His latest book is Small Business Survival Guide(Adams Media). This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state. Copyright 2006 Clifford R. Ennico. Distributed by Creators Syndicate Inc.