Poaching Clients

[Gullion]

Hi,
I am a mortgage broker and I have worked within an estate agency for a number of years. I have recently left this to start up my own mortgage brokerage. My former employer wants me to sign a contract, post employment with them, to say I will not poach or contact clients. I was not intending to do this, but if one of them came to me of their own accord, I would not turn away the business. I never had a employment contract with my previous employer, and I am reluctant to sign anything now, but I was wondering where do I stand legally on this.
Thanks

 

[AlanJ1]

I would not be signing anything now. This is something they should of thought about long before you were leaving.

 

[Financial-Modeller]

They are asking you to voluntarily sign something that could harm your new business.

What reason is there for you to sign it? If there isn't a good reason, don't sign it.

 

[Newchodge]

You cannot be required to sign a contract change for a contratc that has ended. Tell them to ..... go away.

 

[Gullion]

Thanks, that is my initial thoughts. As far as I can see there is no advantage for me to sign it. The advantages all lie with my previous employer.

 

[NickGrogan]

Ask them what incentives they are willing to offer you to sign the contract.

If the sum is more than you expect to pick from those clients, then it may be worth considering.

 

[AlanJ1]

Thanks, that is my initial thoughts. As far as I can see there is no advantage for me to sign it. The advantages all lie with my previous employer.

Ask them what it's worth for you to sign it and then weigh that up?

 

[Gullion]

Thanks for the replies!
I am not going to sign it. It isn't about money or clients, I do not intend to go after them, but why would I weaken my position for no reason.

 

[MBE2017]

Personally I would just say you give your word not to contact anyone for say six months, but if you are contacted before then you will be obliged to help if possible, or it would reflect badly on your new business.

After that you give no promises.

 

[Mark T Jones]

Thanks for the replies!
I am not going to sign it. It isn't about money or clients, I do not intend to go after them, but why would I weaken my position for no reason.

I did wonder if I was missing something, but no, there is absolutely no reason or incentive for you to sign.

 

[DontAsk]

Hi,
I never had a employment contract with my previous employer,

Yes you did. You might not have seen anything in writing or signed anything, but you had a contract.

So long as it didn't include a non compete clause, tell them where to go, in the nicest possible way.

 

[tony84]

This happened when I left a brokerage I worked for.
I did not like my boss, but he asked me to sign a leaving contract which basically said if I do any business with his clients I have to pay him a grand per client.

I signed it. I signed it for 2 reasons:
1) I had no intention of taking any of his clients.
2) If he had asked me to sign it when I joined, I would have done.

Morally I seen it as the right thing to do. As much as I did not like the bloke, he helped me get CAS and gave me some experience when I was struggling to find someone who would.

When I left 2 of his customers contacted me. One of them I turned away, the other it was his wife (who was not a customer) that wanted a mortgage.

It sounds like you can do what you like. Just ensure you are not the one contacting them, you could be breaching GDPR/data protection. In theory the day you leave your employment you should have no records of the clients on your phone, computer, email, paperwork, notes on the back of a fag packet etc etc.

You dont have to sign the contract as far as I am aware.

 

[Lucan Unlordly]

Hi,
I am a mortgage broker and I have worked within an estate agency for a number of years. I have recently left this to start up my own mortgage brokerage. My former employer wants me to sign a contract, post employment with them, to say I will not poach or contact clients. I was not intending to do this, but if one of them came to me of their own accord, I would not turn away the business. I never had a employment contract with my previous employer, and I am reluctant to sign anything now, but I was wondering where do I stand legally on this.
Thanks

Is the Estate Agency likely to be able to forward clients to you?

 

[roydmoorian]

Somehow I would expect that any clients forwarded from this previous employer are not likely to become worthwhile prospects….

 

[MBE2017]

Somehow I would expect that any clients forwarded from this previous employer are not likely to become worthwhile prospects….

It differs in different industries. In my old companies I never liked passing on work, but IF I was not the right solution for the company and it would cause both of us problems, I would often pass them onto a better fitting company for their needs. Those companies often did the same in reverse and end of the day the clients remembered who had their best interests at heart.

 

[MikeJ]

Is there much repeat business in the mortgage world? I thought once you had one, you weren't likely to need another for at least 5 years or so?

 

[tony84]

I dont have records going back before 2017, but I have customers who still come back from then.
I know I have a customer who still comes back from 2015.

Historically 2 year fixed rates have been the preference. 5 year fixed rates are becoming more of the norm at the minute but not for everyone - people who want to move, people renovating properties/doing extensions, people who will be having kids etc etc.

 

[Lucan Unlordly]

Is there much repeat business in the mortgage world? I thought once you had one, you weren't likely to need another for at least 5 years or so?

True, but they may have friends and relatives that need mortgages?

 

[Jenny Rimell]

Hi,
I am a mortgage broker and I have worked within an estate agency for a number of years. I have recently left this to start up my own mortgage brokerage. My former employer wants me to sign a contract, post employment with them, to say I will not poach or contact clients. I was not intending to do this, but if one of them came to me of their own accord, I would not turn away the business. I never had a employment contract with my previous employer, and I am reluctant to sign anything now, but I was wondering where do I stand legally on this.
Thanks

Hi Gullion, Many employers will add restrictive clauses in their contracts of employment to prevent such "poaching or working for competitors" normally restricted between 6-12 months after the employee leaves. As you had no employment contract with them, you appear to not be bound by any restrictions. Good luck with your new business.

 

[Deleted member 335890]

If a client came to you, the employer would not be able to enforce it. Having worked in a mortgage consultancy this was a frequent question asked when people resigned!

 

[Newchodge]

If a client came to you, the employer would not be able to enforce it. Having worked in a mortgage consultancy this was a frequent question asked when people resigned!

The employer has nothing to enforce. There was no restrictive covenant in the contract.

 

[DontAsk]

As you had no employment contract with them, you appear to not be bound by any restrictions. Good luck with your new business.

Where do people get the idea that there is no contract of employment?

 

[Newchodge]

Where do people get the idea that there is no contract of employment?

Shorthand for 'no written contract and therefore no restrictive covenant'?

 

[jnc]

Hi,
I am a mortgage broker and I have worked within an estate agency for a number of years. I have recently left this to start up my own mortgage brokerage. My former employer wants me to sign a contract, post employment with them, to say I will not poach or contact clients. I was not intending to do this, but if one of them came to me of their own accord, I would not turn away the business. I never had a employment contract with my previous employer, and I am reluctant to sign anything now, but I was wondering where do I stand legally on this.
Thanks

Having left Quilters Plc, where they took 2 advisers to court and effectively bankrupt them, you must tread very carefully. Advise your last company (in writing):
1. that you will not sign any post employment contract.
2. You will not approach any client that did business with you (as this would breach Gdpr rules)
3. If any previous client approaches you, then you are free to deal with this client under your new business