Taking Customers With You When You Start a Business

What do you think are your legal risks if you to break off on your own to launch your new business and take your clients with you?

In business legal rules, there is no such business that “owns” its customers or clients. Everybody is free to use whichever service provider they prefer to like. There are no “agreements for restraints of trade” legally implemented for your customers and clients.

This will point usually on the employer’s side. Training someone for several years hoping that they are of help to grow your business, as it should be, but suddenly they just decided to quit and taken almost half of your customers is the worst nightmare.

The “nonsolicitation” agreement should be signed by employees promising not to contact any of the firm’s clients or customers for specific period months after they leave the firm for some reasons. This will be a degrading battle between the firm and the employee after all. Customers or clients are not affected with these agreements.

Even if the firm didn’t make you sign any “nonsolicitation” agreement, you are still liable if you blatantly steal the firm’s customer and that is explained in statute called “Uniform Trade Secrets Act”. You will be liable if your state adopted this act because you thereby prohibited from taking your employer’s clients and using them for your benefits even without the employer’s written agreement.

A firm’s customers’ list is considered a trade secret unless the trade’s contents can be obtained through independent sources. So if you steal the firm’s clients list then send a letter to everybody on that certain list announcing about your business, that firm will view your deed as a theft of its trade secrets thus making you liable for a case.

However, when you announce your business opening in a local newspaper with the notice that you have been separated from that firm where you once worked, there is nothing you have to be liable with. By doing so, you are considered making general solicitation from the general public or the community.

You might question, “How about when I directly contact the clients whom I had some personal relationship during my employment period at the firm”. The answer will be found when you will follow these guidelines.

  • Since you’re the sole and exclusive contact for those clients before, you must limit your solicitations—if you’re only doing the client’s work but he goes out with your boss for private business discussion then you can’t be called as “sole and exclusive” firm contact so you should avoid soliciting them.
  • You have to leave the firm before doing some email or writing any business correspondence to those customers with your new contact information.
  • Do not give these clients any “deals” or discounts you wouldn’t also give to those who walk off the street.

Whatever it takes, you should remove any customer files, any specific information from the firm when you go for your own and documents, even if the client chooses to follow you. Let your solicitations to the client be confirmed with a “form letter” by them and send to your old firm requesting for the files to be transferred to you. In case the client owed some amount to the old firm then wait with patience until he has settled before making your move to get the files.




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