Should I Sign A Customer Non-Solicitation Agreement

  1. Non-Compete Agreements
  2. Should I Sign A Customer Non-Solicitation Agreement
signing contract

Frequently, employers and companies who retain or hire new employees or independent contractors will require that such folks sign an agreement which contains a customer non-solicitation agreement.  A customer non-solicitation agreement is an agreement that prevents the signor from poaching customers after the relationship is over.  Courts will routinely enforce such provisions of employment agreements or vendor/independent contractor contracts.  The decision to sign or not sign such an agreement is very serious and significant.

You should consider not signing such an agreement if you highly value existing customer relationships.  Once you sign an agreement like this and go to work for a new company, then the company will have a strong claim to those relationships going forward.  In most instances these provisions are not negotiable.  Companies may be willing to negotiate the terms if what you are bringing to the table is very desirable.

Your best leverage for negotiating these provisions is when you are in the interview process before you accept the job or contract.  The company might agree to a list of customers you are bringing to the relationship that it will agree you can “take with you” when you leave in order to induce you to agree to the new job or contract.  You should consult a lawyer to help you navigate these waters.

Customers that you develop while working for or with the company will be protected.  The company will expend time, resources, and effort to support your sales efforts.  This investment will generally justify the non-solicitation restriction.

Each contract-each case is unique.  If you have already signed a solicitation restriction and need to get out of it, there are some ways it can be done.  First, is negotiation.  Enforcement of these agreements can be expensive.  If you approach the company early after you leave, it might be willing to negotiate with you over the terms of keeping some or all of the customers in exchange for other concessions, like territory restrictions or other terms.

If you are presented with an agreement like this you should seek legal advice.  Even if the contract is “nonnegotiable” you still need to know and understand exactly what your obligations are under the contract and what the restrictions mean legally.   You can only evaluate if the opportunity is a good one if you fully understand the contents of any agreement.

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