What Is The Law on Taking Clients from Your Employer after You Quit - Employment Contract Forbids It

bigballerbrand on 22/09/2018 - 07:08
Last edited 22/09/2018 - 07:08

So I am about to leave work, and would like to take 2 clients with me. These 2 clients, only deal with me at work and not my boss, and I am confident that if I merely tell them that I am leaving work, they may ask where are you going and can we follow you.

So my employment contract clearly states that for the next 6 months:

  1. can't directly or indirectly accept an approach from a client
  2. can't directly or indirectly approach a client myself

I was wondering if anyone knows if this is legally enforcable. It is 2 paragraphs in the employment contract. If a client approaches you and says I want to move where you are moving to, is there a way for the employment contract to stop it?

Thanks for the advice everyone.

Cheers

Financial

Comments

  • [Deactivated] on 22/09/2018 - 07:12
    +1

    What industry are you in?

    Enforceable? No.
    Dick move? Yes.

    • bigballerbrand on 22/09/2018 - 07:18
      -2

      Financial Planning Industry.

      I understand it is a bleep move. I will have to live with that. In my personal opinion, the employer has treated her employees like crap which probably still doesn't justify the action.

      May reconsider just moving on and not enticing the client to follow.

      • [Deactivated] on 22/09/2018 - 07:23
        -1

        There may be data privacy or some kind of regulation, not just you employment contract at play here too?

      • Kangal on 22/09/2018 - 07:25
        +3

        Just remember this can have repercussions when you're looking to get a new job.

        Overall, I think the smart move would be for you to get a new phone number…strictly for work.
        Then provide this number to those clients and tell them that you won't be in the office for 2 weeks, but to contact you if they need anything.
        If they never call, no problem.
        If they call you, hear them out and then say you had a disagreement with your employer so are now representing a new company, but you would be happy to help them if they would like.

        That way, its the clients who have pursued you and not the other way around. Plausible deniability.
        Besides, if your company was providing excellent service, the customer wouldn't switch, so this puts the company's reputation (or karma) in a field test of sorts. Good luck.

    • kipps on 22/09/2018 - 07:35
      +6

      Don’t know why you think it isn’t enforceable (at least in respect of non-solicitation). See AMP v Manning on Austlii as just one example.

    • HighAndDry on 23/09/2018 - 10:53
      -1

      Not completely unenforceable. And the employer might just decide to tie up OP in the courts costing them thousands (if not far more) even if they'll lose.

  • [Deactivated] on 22/09/2018 - 07:25
    +1

    In general, a 6-12 month gap should be tried to be maintained as a professional. If the client wants to follow you after leaving then there is no stopping that, it’s a legal grey area.

  • whooah1979 on 22/09/2018 - 07:32

    Financial Planning Industry.

    It's surprising that your contract doesn't include a ncc that they may use to sue you.

  • thatonethere on 22/09/2018 - 07:41
    +2

    If it is really important to you. Get an employment lawyer to look at your non-compete clauses. Depending on state sometimes they are invalid but your scenario looks fairly enforceable.

  • Quantumcat on 22/09/2018 - 08:27

    You can do whatever you want but your employer could blackball you and stop you from getting work in the future.

  • Melb69 on 22/09/2018 - 08:38

    This happens a lot as in clients going where staff moves to. I would suggest that you wait 6 -12months. If they are still keen on using you then great. Look at it this way. If you were an employer and a staff member left and took client away would you be happy.

  • hawkeye on 22/09/2018 - 08:53
    -2

    If your a sales rep
    Company phone make sure to download all contacts ect off it before you tell them. As soon as they find out they will seize it get you to leave asap and pay you out what they owe.

    Work for a new boss and he tells you to go and see old clients or anyone in the industry who are you going to disobey?

  • mbck on 22/09/2018 - 09:14
    +2

    Technically the client's details are the company's. You are there to provide service. So that's considered stealing tbh.

  • djkelly69 on 22/09/2018 - 09:15
    +3

    Why would a clear and explicit term of your employment contract be unenforceable?

    Some restraint of trade terms have been found to be unenforceable (can't work within a radius of X kms or for a competitor for Y years), but this is not a restraint of trade - it is to stop you stealing their clients.

    It may be difficult to enforce/prove, but that doesn't make it unenforceable.

  • DarkOz on 22/09/2018 - 10:30

    They can't enforce it but they can sue you or reserve the right to sue you. If you are a licensed person you should be careful not to do it as this could risk your license. There is a fine line between you taking your clients with you or your clients following you.

  • [Deactivated] on 22/09/2018 - 11:29
    +2

    Poaching staff and stealing clients when you leave - you'd be treated like a leper if word gets out and word eventually gets out.

    I would never do business with anyone whom doesn't respect a promise and/or contract. I'm not going to be the next sucker.

  • monkeybusiness on 22/09/2018 - 11:34
    +1

    Why risk potentially being sued? These clauses are fairly common in professional work contracts to prevent leaving staff from poaching and taking clients with them.

    6 months really isn't that long. Poach them afterwards if you want. I'm sure if your clients like you that much you can explain the situation to them and they will most likely still be happy to keep in contact and switch after 6 months are up

    • bigballerbrand on 22/09/2018 - 13:40

      If you wait 6 months the client will have moved on. Thats like telling your ex gf to wait 6 months until you come back to her.

      • monkeybusiness on 22/09/2018 - 14:12
        +1

        Then that working relationship the client has with you isn't all that important to them.

        Business is all about trust, if you think they will move on from you then clearly you don't trust them or value them enough either to maintain that relationship

  • garetz on 22/09/2018 - 13:17
    +2

    The contract cannot specify if a client approaches you or not, thats absurd. How can you dictate a 3rd parties intentions or actions.

    The clients are free to approach you, you just cant approach them, so let them know you are leaving work, and if they want to move with you, then you didnt break your contract.

    • bigballerbrand on 22/09/2018 - 13:39

      That is what I was thinking. The contract specifies that I am to reject any client aproaches which doesnt seem right. Why would I say no to business and a new client.

      I guess I need legal advice on the wording of the contract

    • djkelly69 on 22/09/2018 - 17:18
      +4

      The clients are free to approach him, but he cannot accept them as clients. It is literally point 1 above:

      can't directly or indirectly accept an approach from a client

      • garetz on 22/09/2018 - 18:24

        What exactly is a client, if they approach him, they effectively stop being a client of the previous employer, the employer cant force a 3rd party to do anything.

        • djkelly69 on 22/09/2018 - 19:21

          Presumably it would be defined as something like an existing or recent client of the company. I don't agree you can claim they are no longer a client simply because they approach someone else to do work.

          The contract can't, and doesn't, try to regulate the conduct of third parties (for obvious reasons), but it can regulate the conduct of a party to the contract. That is why it only says the OP can't accept the approach.

  • haimrevolution on 23/09/2018 - 07:25
    -1

    The company can only sue for loss of funds due to your actions. Get each client to sign a document saying that now you have left they refuse to trade with the old company and have perused your services. That way if they sue for loss of money and want compensation you tell the judge I have signed documents from the clients showing that my leaving which I can legally do resulted in the clients rejecting the company and perusing me hence you caused no loss.

  • Aureliia on 23/09/2018 - 09:37

    They can absolutely uphold the restraint of trade clause.
    Can confirm, work in financial services.
    Not worth the risk.

  • jhmtaylor on 23/09/2018 - 09:45

    The no poaching of clients clause is well tested at law and is enforceable provided the period is reasonable. Any period of less than 12 month would have no difficulty being enforced.

  • Micko179 on 23/09/2018 - 22:50

    See you in Court!

  • OZB Al on 24/09/2018 - 04:44

    Before you leave send them a connection request in LinkedIn, then when you get a new job it will be easy for them to find you if they choose to. But I wouldn't actively try to take them with you, if you do that expect to get sued.

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