Client Poaching implications?

[evo1200]

Does anyone know of the legal implications or penalties for poaching clients? I have a ex employee who is trying to poach clients.
He is also not allowed to work in the same profession within a 15 mile radius for a set period. This was in the contract drawn up by a solicitor when he sold the buisness and was then a employee for a time.
He has broken both of those conditions.

Does anyone know of any case law that is similar?

I come across 2 legal ref's on the internet one is a "Springboard Injuction"
and the other is "tort of conpiracy"

 

[Leemma Consultancy]

I think you need to be very careful with restraint after terminationg clauses. You need to ensure is it drafted so as to only prevent a person from actions that could negatively impact on the business. A 15 mile radius is very wide. If you were to draw a circle does it take you into another town, into water etc? Depending where you are located and the position the person was in, I would think this might be to broad.

You need to look at the wording of the clause. If it was to say 'clients' ' customers' or generic words such as this, the clause might be viewed unreasonable as it is not specfici to that employee and the clients/customers they worked with.

Have you taken any steps to try and settle the dipsute with the assistance of an arbitrator? This might be your best first step if at all possible.

If your ex employee is breaching they are poaching clients and therefore breaching the contract you can taken legal action and seek compensation for the loss associated with the breach. The courts will review your clause and decide whether it is reasonable. It is important to note that if it is not reasonable the courts will not re-write the clause, but will view the entire clause invalid and you will have no further opportunty for redress.

 

[profitxchange]

How much business are you loosing? You need to weigh this against the cost of going to court and your ex emplyee being able to pay any compensation.

Not sure, but could you get an injunction to just stop him?

 

[Bri]

You cant, sorry wrong word, wont stop him doing it, if he's started the ball rolling and getting around and if the business was originally his then he's got a bit of leverage on the model youve created and he's capitalising on the back of you.Pursuing him legally is going to be a long process and your likely to lose more customers to him in the meantime.

IMO and my 2p. Get on the phone straight away and call all your customers advicing them that this is happening and thank them for their loyalty and perhaps offer them a small but manageble incentive for their loyalty, I dont know what you do, but maybe a bogoff or something, you get my drift. Mark my words the only way he's poaching customers is by giving you a bad rep and you need to get ahead of the game here.

( Ive just wasted 5 mins typing this for an old thread, damn damn damn, and I usually check the date first, what a waste of time)

 

[Spongebob]

Old thread or not, it's an interesting issue and one that always mildly amuses me.

What right do companies have to consider their clients as their 'property'? I don't see that this guy is 'poaching' clients off anybody - he is simply offering his goods or services to people he knows want them - and presumably at a better price or with better service than the OP is offering. Otherwise, why would people buy off him?

This surely, is just free trade?

There is nothing realistic that can be done to stop him. Nor should there be.

Too many people think that buying an established business is a short cut to success. It isn't. Clients' loyalty (if any) will generally be to the original owner - not to the company which now has new owners with whom he has no relationship.

Better IMO to start from scratch yourself.

 

[David Griffiths]

One thing that's been overlooked in most answers (if I've read the opening question correctly) is that the alleged poacher is not simply a former employee but is actually the person who sold the business to the OP

In the case of a sale, it is possible to draw up much stronger restriction clauses than it would be for an employee. Surely the remedy is an action for breach of contract?

 

[discountfuel]

i thought that these confidentiality agreements never stand up, im pretty sure of it in fact

 

[Williams lester]

i thought that these confidentiality agreements never stand up, im pretty sure of it in fact

But this is not a confidentiality agreement, it concerns the sale of a business from one party to another. These normally have standard terms to ensure the old business owner cannot sell the business and then take all the clients to a new business.

 

[discountfuel]

how would you prove they are poaching