Hi Guys,
Is it illegal to directly contact customers who are with your ex-employer and tell them about your new company? If no contract of employment was ever drawn up, let alone one with a no competition clause?

Post split into new thread ;)

No, it isn't illegal in the United States. Even if a contract was drawn up, not all states would enforce it the same way anyway. You'll of course draw the ire if your ex-employer by doing so, and they could find *other* reasons to make your life miserable; but it isn't a crime, criminal or civil. This is at least how it works in Washington State.

If you want a second opinion you can always ask competent local legal counsel, too.

Hi Guys,
Is it illegal to directly contact customers who are with your ex-employer and tell them about your new company? If no contract of employment was ever drawn up, let alone one with a no competition clause?

Why would you want to? If you got your employment terminated on bad terms and you want to start your own company, do exactly that, don't go and attempt to "steal" clients from your former employer just out of spite. You company we just get a bad image from the get go.

Advertise your services on the internet, provide good customer support and reliable hosting and customers will come to you. Build your company by yourself, don't steal clients from ex-employers, and sleep better at night knowing you run a fantastic and trustworthy company

as far as i know its not illegal, in fact im pretty certain its not, but im sure you will have signed a contract when you started and part of it will most likely have stated that for a period of so many years you agree not to contact any clients with a view to soliciting them

This is why you should always have signed agreements with any partner or employee. Contacting ex-employers customers trying to 'poach' them is pretty low and a poor way to do business.

Hopefully your customers are loyal enough and enjoy your service enough to not considering moving - good luck.

This is why you should always have signed agreements with any partner or employee. Contacting ex-employers customers trying to 'poach' them is pretty low and a poor way to do business.

Hopefully your customers are loyal enough and enjoy your service enough to not considering moving - good luck.

You cannot "poach" someone who is satisfied with their services. If you are worried about it, that says to me that you feel your company is not doing a good enough job keeping its clients happy.

it doesn't have anything to do with any law but if they had a contract and there was a section that stated that the employee cannot contact any current and future clients then the old employer could sue for big bucks.

but other than that I think it's unethical to try to steal clients away - I've had people do that with my gaming forum lol, they open up their own (while a mod on my forum) and then try to advertise all over trying to get people to sign up - it's annoying, and low...

It MAY be against some privacy laws for you to have your former employers customer list. Of course it's possible to remember some customers names, but if you have the list you could be breaking the law.

And you would be breaking the law if that list was poached off your old employers system(s) as that data belongs to them.

Illegal no.. Immoral yes

Possibly a breach of contract depending on your employment terms/nda's and you could be sued in civil court.

Illegal no.. Immoral yes

Possibly a breach of contract depending on your employment terms/nda's and you could be sued in civil court.

Best answer so far...simple and to the point! :)

jphilipson is right though. It is NOT illeagal to steal clients from a former employer. In some states, non-compete clauses are worthless alltogether as well. You can, however, open yourself to being sued by your former employer. If you are in a state that will enforce a reasonable non-compete, then your former employer can seriously hurt you financially. Then again, if you never signed one, that does not really matter so much.

Morally and ethically, however, it is extremely poor form to do it. How would you like it if an employee of yours did it to you.

You should also think of the clients. If they are not unhappy with their services and already contacting you for a solution, then you are interfering with their businesses. Would you really want their business if they are so inclined to simply pack up and leave their host so quickly (assuming the host is providing a decent service)?

Advertise your services on the internet, provide good customer support and reliable hosting and customers will come to you. Build your company by yourself, don't steal clients from ex-employers, and sleep better at night knowing you run a fantastic and trustworthy company

Like InstantPH says; Build your business yourself. Do it honestly, and you will get a greater return on investment (and I am not referring to the financial return).

Since you haven't said what country you live in, I'll just point out that depending on how you went about this then, yes, it could be illegal.

I get the feeling that you'd be using data you had access to while you were under their employment, and using that data for what you're describing could land yourself in deep water in the United Kingdom.

Hi Guys,
Is it illegal to directly contact customers who are with your ex-employer and tell them about your new company? If no contract of employment was ever drawn up, let alone one with a no competition clause?

If there's no contract, pretty sure it is fair game (I'm in Canada). But i wouldn't suggest it for many reasons.

Like seriously, if you can only survive by the work of someone else, and in a non-ethical way.. what kind of business are you in really?

It's slightly different if you are the one with the key relationship and have been maintaining the client (account-rep) for like 10 years and now you're going out on your own and take some key clients with you (again, assuming you had no employment contract).

Even that i find it a little slimy.


Lawrence

it doesn't have anything to do with any law but if they had a contract and there was a section that stated that the employee cannot contact any current and future clients then the old employer could sue for big bucks.

but other than that I think it's unethical to try to steal clients away - I've had people do that with my gaming forum lol, they open up their own (while a mod on my forum) and then try to advertise all over trying to get people to sign up - it's annoying, and low...

Most countries do not allow "employee can't contact my customer indefinitely" clauses.. the main reason is because of the "everyone has a right to earn a living" mentality.

So it's usually like 1 or 2 years from termination.


Lawrence

Just be careful of the difference between contacting your old employers customers you knew and stealing a copy of their client database.

As someone mentioned above most contracts have statements like this in there, who knows if they can be enforced though.

Just be careful of the difference between contacting your old employers customers you knew and stealing a copy of their client database.

As someone mentioned above most contracts have statements like this in there, who knows if they can be enforced though.

I totally agree. Having a pre-existing relationship with some clients is different than cold-calling 50 people on a "borrowed" client-list.


Lawrence

Just be careful of the difference between contacting your old employers customers you knew and stealing a copy of their client database.

As someone mentioned above most contracts have statements like this in there, who knows if they can be enforced though.

if it's a valid and signed contract then it can and will be enforced in court. assuming both people are from the US (I am not familiar with the law of other countries) - even if they are from different states, you can take it to a federal civil court to settle because it can be considered a breach of contract even after employment.

I think its wrong ethically, but lawfully not illegal. Depends on ur business practice .

Legality depends on the things people have allready said,

but 'ethicaly' it is not as simple as my first reaction, which is 'realy bad form'.
It does [imho], depend on 'who's' clients they are,
ie. can you honestly say to yourself, they are my clients[to me that would mean I was established with the clients before introducing them to the 'old co'.],
or are they the clients of 'the company' ie you only have had dealings with them 'through' the old co..
My guess is the latter, in which case 'do you truely want to stoop that low' ?

As a side note, it is pretty common advertising agencies lose BIG customers to creative employees quitting their jobs to open their own ad agencies or moving to another ad agencies.

As a side note, it is pretty common advertising agencies lose BIG customers to creative employees quitting their jobs to open their own ad agencies or moving to another ad agencies.

We are talking about the "noble" profession of hosting though.. not advertising. :) Haha.

There is gray areas for sure. Let's say you work for someone, and then you recommend the server to your brother-in-law. After a year, you start out on your own and he comes with you. I don't think many people would say this is bad form.

I believe bad form (unethical, and likely illegal) is taking the customer list and then calling them up one by one.


Lawrence

We are talking about the "noble" profession of hosting though.. not advertising. :) Haha.

Made my day:rofl: :rofl: :rofl:

But it's true, at least 15% of hosts are known to be 'noble',
as opposed to 'less' ;) from the advertising industry.

Please help! I just left an insurance company and I did sign a non-solicitation agreement. The other day, I ran into one of my former customers with the old company in Wal-Mart. I told him the name of the new company I was working for. A few days later I received a "continuing obligation" letter in mail reminding me of my obligations not to solicit customers. Would bumping into a customer in a public place be the same as soliciting that customer. I did not seek the customer out, just ran into him. Can't I tell him where I'm working???