If The Customer Calls Me Am I Violating My Noncompete?
An AOL Jobs reader asks:
Donna, if a customer calls your personal cell phone to inquire where your new place of business is and whether or not you would like to present a competitive bid against your previous company is that in violation of your noncompete agreement? I did use my personal cell phone for business and all of my customers and prospects have my phone number.
Additionally if you have built a "friendship" with some of your customers over the course of a few years is there any laws that would prevent you from visiting them or calling them from time to time as long as business was not discussed?
I sure wish I had an easy answer to this question, but it will largely depend on your state law and how it looks at noncompete agreements and nonsolicitation obligations. Here are some general things to be aware of when considering whether or not you're allowed to speak with former customers:
- Legitimate interest: In general, noncompete agreements have to be supported by a legitimate interest other than preventing competition. That's because preventing competition violates state and federal antitrust laws. Protecting trade secrets and confidential information like customer lists are some of the legitimate interests courts in your state might consider when deciding whether your noncompete agreement is legal.
- Trade secrets: While customer lists can be trade secrets, many of them aren't. For instance, if the company doesn't take steps to keep customer lists confidential, and instead lets sales people take them home to keep track of commissions, it's hard for that company to call the list "secret." Same if the company requires or allows you to contact customers on your personal cell phone or even gives out your personal cell phone number to customers. How can they say that customer is a trade secret when they made you use your personal device for contacting the customer?
- General advertisement versus direct solicitation: When the customer calls you, it may depend on how they got your information whether or not a court would consider you in breach of your agreement. If they had your number from prior business, knew you before you started with the former employer, or got your number from a general advertisement (think Facebook page, newspaper or industry publication ad or web page) then you may be okay. If, however, you called them up and left a message saying you had your own business and here is the new number, you may have crossed a line. However, if there was no legitimate interest to support the agreement in the first place, speaking with customers may be fair game in any event. If the customer doesn't want to do business with your former employer anymore or if the relationship already ended, few states will prevent them from following you.
- Friends and family: If you have a friendship or family relationship with a customer and don't talk about business, it's hard to imagine what legitimate interest your former employer could claim that would prevent you from speaking with them. However, in my experience in employer-friendly Florida, no argument is too ridiculous for the management-side to make. For instance, I had a case where a sales person had turned his son into a customer. I asked opposing counsel if they seriously meant the extremely-broad nonsolicitation clause to mean they couldn't speak or have Thanksgiving dinner together for two years and the answer was yes. I doubt a court would enforce such a restriction, but that doesn't mean your former employer wouldn't try.
Even if you think you can win a lawsuit, overcoming a noncompete agreement can be extremely expensive and risky. Most likely your new employer will get a nastygram from your former employer and be told to fire you or they will be sued. You may be fighting from the position of being unemployed. Some employers will agree in writing to pay your legal fees if you do get sued on a noncompete agreement, but that's rare. If you have your own successful company and it's worth the fight, then you should get your war chest ready by setting aside lots of money for legal fees.
Noncompete agreement enforcement is tricky and very state-specific (and sometimes how they're looked at varies from judge to judge, so the outcome is hard to predict). I would strongly suggest you speak to an employee-side lawyer in your state and review your restrictions with them before you do anything to contact customers.
If you need legal advice, it's best to talk to an employment lawyer in your state, but if you have general legal issues you want me to discuss publicly here, whether about discrimination, working conditions, employment contracts, medical leave, or other employment law issues, you can ask me at AOL Jobs.
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