Client Poaching implications?

speedtwin

Does anyone know of the legal implications or penalties for poaching clients? I have a ex employee who is or will trying to poach clients.
How would you go about proving it?
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 when he sold the buisness. He has broken both of those conditions.

Does anyone know of any case law that is similar?

ukbill69

Not sure you have a case here, might be wrong. If your doing business well and your clients done leave you then what is there to worry about.

Vomityspice

You problem may be that the clause is unenforceable due to 'restraint on trade' - EU Law - free movement of workers. Read the Bosman ruling for a quick overview. He's probably has already been told this by his legal advice....

Also, he's not an ex-employee if he sold the business. He was a director (or a partner?). I'm assuming when he sold the company, what he actually sold was the 'good will'. i.e. the good name of the company. Depending on what the contract said, you might have grounds for a contract breach, but it's likely to cost you lots to pursue with little chance of success. How would you quantify your damages? The client has a free choice to contract with who ever they like!

I.e. if the contract said, 15 miles radius, it would be fairly simple to have your business address 16 miles away. Company's can be registered anywhere! which would allow him to trade in the building next door!

Could be faulty draftsmanship of the person who wrote the contract! It's difficult to cover for every eventuality! Especially, if is was something that was just 'knocked up'. If a solicitor was involved in the sale they should have done a better job (lots of contract precedents available to them of the shelf for such situations!)

Unless your making lots of money, and are happy to spend even more on legal fees, it probably a non starter (Just my opinion).

speedtwin

It was drawn up by a solicitor and he was a employee before leaving and i am sure he has a client contact lists.

dharm999

Speedtwin

we ahd the same situation. we got our solicitor to send a letter to our ex employee and his new company, saying that he wasnt allowed to poach our clients, as per the terms of his contract, and that we would take legal action if he continued. He did stop, but in reality he could just pass the contacts to someone else in the ompany and ge them to do the poaching. Sending a solicitors letter will only delay the inevitable.

The best thing to do is to look at your client list from the ex employee's point of view. Which clients are the ones he would want to pinch? The biggest? most profitable? Etc.. Then once you've identified these, be proactive and go and talk to these clients, tell them that you value their business, etc.. and see what else you can do for them. If it means a small drop in price in the short term, to keep them for the long term its worth it. You never know you make pick up extra work as a result of the meetings.

Good luck

slipp_digby

I was advised that restrictive covenants on working in certain areas/sectors are very difficult to enforce if an employess leaves.

Follow the suggestion above and devote your energy to making the business better than his!

cavework

Give him a run for his money. You have been established longer and should have references and client confidence.
Get in touch with them now.
dharm is right