Solicitation of Former Clients or Customers: Surefire Way to Get in Hot Water on Non-Compete Agreements in Pennsylvania

In Pennsylvania, if You Have a Non-Compete Agreement and Solicit Former Clients or Customers, You Are Asking for Trouble


Focus on New Customers

If you have a non-compete agreement, and nevertheless go to work for a new company that competes with your former employer, you will likely be all right UNLESS you try and take customers or clients away from your former employer.

Why is that?

Pennsylvania courts generally do not want to enforce non-compete agreements against Joe/Jane Average Employee simply because he/she is working for a competitor of his/her former employer.

Rather, non-compete agreements are enforced only where doing so is necessary to protect the legitimate business needs of the former employer. 

Simply stated, the average employee working for a competitor of his/her former employer does not pose a true threat to the former employer's legitimate business needs. 

NOTE:  If you posses knowledge about a true trade secret maintained by your former employer, then you are NOT Joe/Jane Average.  For example, Thomas's English Muffins closely guards its formula for how to put the nooks and crannies in its muffins.  Only 7 people within the company know the secret.  When one of those 7, Senior VP Chris Botticella, left and joined Hostess, his non-compete agreement was enforced.

Soooo good.  And so Very Secret!

Odds are, you do not have such a trade secret.  If you do, however, your non-compete agreement will be enforced even if you never solicit a former client or customer.

How Do I Know What State's Laws Apply to My Non-Compete Agreement?

What Law Applies?

This is usually spelled out in the contract.  Click Here to learn more.  Otherwise, the law of the state in which the contract was signed and/or performed will control.  It is important for you to determine what state's laws govern your contract before selecting a lawyer to help you.

Under Pennsylvania Law, Soliciting Clients or Customers of Your Former Employer Does Pose a Threat to Your Former Employer's Legitimate Business Interests

Indirectly = No Straw Parties

However, if you utilize the contacts you made with clients or customers during your previous employment in order to take business away from your former employer after you leave, a Pennsylvania court will usually stop you in your tracks.

Why?  Well, the overwhelming majority of non-compete agreements contain non-solicitation clauses that prohibit the solicitation of former customers. And, while merely working for a competitor of your former employer is not going to cause them provable harm (no mater how wonderful you are), taking their customers will cause them provable money damages. Courts will not countenance that, and your next stop will be Injunctionville.

So, my advice is, stay away from those former customers! 

By the way, you cannot get around this problem by using a third-party, a straw person if you will, to solicit those former customers on your behalf.  Almost all non-solicit agreements clauses say that you cannot "directly or indirectly" solicit former customers.  Using a straw person is exactly what they mean by "indirectly."

John A. Gallagher is an employment lawyer who represents employees in Pennsylvania. 

John also has referral arrangements with attorneys skilled in representing employees throughout the United States.  Click Here to request a referral.

Click Here if you have questions about any aspect of employment law, from wrongful termination, to wage and overtime claims, to discrimination and retaliation laws, to Family and Medical Leave…

Click Here if you have questions about any aspect of Pennsylvania Unemployment Law, from willful misconduct, to voluntary quit, to Referee Hearings, to severance issues…

Click Here to e-mail John directly.

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