changed jobs

[jackweho]

For some reason, my screen name did not post the first time. This is Jackweho. Just finished my 4 hr Ethics Continuing Ed for CA renewal.
Two rules were prominently discussed:
1.Golden Rule: "Do unto others as you would have them do unt you" or to paraphrase:Treat others as you would like them to treat you.
2.Platinum Rule: "Do unto others as they would like you to do unto them" or to paraphrase: Treat others the way they would like to be treated.

I am astonished after reading some of these comments, implying that there is nothing unethical at issue in this scenario. Citing non-compete clauses, poor management supervision, employer fault, etc.: what a crock!
The issue is honesty, fair play, professionalism, and plain old common decency. To hide behind the fact that there was no "non-compete" clause may be a legal justification but not a moral/ethical one.

I guess the few of us that voiced our outcry at the lack of ethics are dinosaurs in the new age of ethics and morality.

[jctwindad]

Everyone keeps referring to a customer list as a "trade secret". I am an agency owner, and also law school graduate. A customer list does not meet the definition of trade secret. The following is from Black's Law Dictionary:

"trade secret n. a process, method, plan, formula or other information unique to a manufacturer, which gives it an advantage over competitors. Therefore, the trade secret has value and may be protected by a court-ordered injunction against use or revelation of trade secrets by an employee, former employee, or someone who comes into possession of the trade secret. The employer may seek damages against such a person for revealing the secret. In addition, the owner of a trade secret involved in a lawsuit may request a "protective order" from the judge to prohibit revelation of a trade secret or a sealing of the record in the case where references to the trade secret are made. A trade secret is a business process and not a patentable invention"

Most all of the replys that allege contact with old customers is illegal and unethical seem to be from agency owners. Most all also seem to be from agency owners who have not protected themselves with a Non Piracy or Confidentiality Agreement. Ladies and Gentlemen if you have not protected yourself with a legal document - do not expect the court to draw one for you, or to imply that one existed. Courts will side with the employee in each and every case like this.

Are the customers that go through a cashiers checkout line in the grocery store "trade secrets" Of course not. Are the customers of a restaurant, served by a waitress trade secrets - don't be ridiculous. It makes no difference that an employee was paid to service these accounts. Owners, if you want to protect yourself, do your homework and use a legally enforceable document. Without one - you're toast.

[jackweho]

I guess the only "trade secret" is what is fair play in the marketplace.

Does Black's also differentiate between legal and ethical? The NASD very specifically does cover this subject in their required Continuing Education course. It seems all anybody cares about is the LEGALITY; guess that is why we have so many lawyers, and so few moralists (not referring to right-wing politicians)

I rest my case; I'm through even reading, much less participating, in any more forums. It's my ball (morals/ethics) and I'm taking it home with me. I guess all those lessons and examples set by my parents and wonderful school teachers did not prepare me properly for the real world of the 21st century: screwor versus screwee. Now I have to re-program my kids and instruct them how to act immorally and/or unethically as long as there is not a legal statute to prohibit it.

Good luck to the rest of you-may you all encounter such an agent in the future; love to see how you would feel if the shoe were on the other foot.

THANKYOUVERYMUCHANDGOODBYE

[jctwindad]

Don't misinterpret my message. I am not saying that I agree that it is ethically OK for a departing employee to solicit accounts. What I am trying to get across loud and clear is the fact that courts will side with the employee, unless their is a legally binding Agreement of some type in place. So, if you don't want to find yourself on the losing end of this - get an Agreement in place. Most of the messages seem to be from Agency Owners who do not have an Agreement in place, and who seem to think that courts will side with them anyway. Not going to happen.

[wlunday]

Wow! What a tangent this discussion took!

The original question was... is there anything WRONG with contacting (soliciting) clients from the previous employer's book of business...

I think the professional, ethical, career producers in this forum all agree that IT IS WRONG.

For you to act in such a way just because the prior agency owner / boss was not a nice person just brings you down to his level. Personally, If that's what you expect to do, I would not hire you!

Swymmer

[gregcw]

Everyone keeps referring to a customer list as a "trade secret". I am an agency owner, and also law school graduate. A customer list does not meet the definition of trade secret. The following is from Black's Law Dictionary:

"trade secret n. a process, method, plan, formula or other information unique to a manufacturer, which gives it an advantage over competitors. Therefore, the trade secret has value and may be protected by a court-ordered injunction against use or revelation of trade secrets by an employee, former employee, or someone who comes into possession of the trade secret. The employer may seek damages against such a person for revealing the secret. In addition, the owner of a trade secret involved in a lawsuit may request a "protective order" from the judge to prohibit revelation of a trade secret or a sealing of the record in the case where references to the trade secret are made. A trade secret is a business process and not a patentable invention"

jctwindad

The other information unique to a manufacturer, which gives it an advantage over competitors are the customers names, addresses, drivers license numbers, vehicles owned, driving records, insurance companies placed with and most important the expiration dates. As your quote from Black's states, it is a BUSINESS PROCESS and these are part of and the results of that business process. Client lists ARE a Trade Secret.

GregCW

[jtabosida]

First off, check and see if you have a non compete clause in your previous employers agreement and if there is, see if it has a timeline outlined in it. If there is, then check with your state or an attorney on the legalities of non compete clauses in your state.

Some states make non competes illegal. Doesn't mean your employer still can't put a clause in their agreement but if it went to court the whole provision would be thrown out of the contract. I know this because I went through it. I am a firm believer in doing things ethical not just to my clients but to my agents as well. Just go about it without slinging mud and with respect for your previous employer. After all he obviously was there when you needed him and you never know when you may need or call on him in the future. DONT BURN YOUR BRIDGES!!

As far as ethics are concerned, I dont see what it has to do with that. Sure they paid $1,000's in advertisement to bring in business. What fool doesnt? I see agents pay that out of their own pockets while working for an employer. People buy people not companies. If you want a Ford truck and go to a crappy person who you dont trust, guess what? Your not gonna buy it. On the other hand if you go to the dealership in another local area and the salesperson seems they have you best interest in mind chances are you will buy from that peson. My point is people do not buy things from people they dont trust.

I dont know your exact circumstances on why you left to begin with but as a business owner myself, you learn from your mistakes and you move on. Obviously you are not going to take every client they have, you may find out none of them want to move. Who knows. Just be professional, courteous and above all focus on targeting new clients more than the old ones. We all have families to feed and there are plenty of fish out there.

[MsLilagent]

Work hard...be honest...be sincere and you will succeed in this (or any) business. Seek out short cuts....and you will be disappointed! (From Pita3333)

I Love the quote/statement.

We had an employee leave our office after 15 years and she was asked to sign a no-compete.

After you are with an agency for a while there are clients that you write, if they walk in or another client gave them your name and number!! However I do not beleive that the files or clients belong to you.

If you are as good as you say you are I hope that you put everything in writing with the new one. And if the clients do like your service they will find you. But becareful word of mouth and work both ways!!!

Good luck in your new job!! and Piece of Mind!!

[LadyBroker]

How do you ask someone to sign a non-compete on their way out the door?

[sanddog1]

I am not surprise to see you guys and gal beating a dead horse. No non-compete clause do not hold up in CA, period. My Lawyer say move on, unless you have more money then know what to with for (fun). He need s a new Porsche. The only way a contractual clause will protect us is when in the same broker cluster and a producer becomes and agent or joins another agency within the same.

[LadyBroker]

Non compete agreements do not hold up in California, this is true, BUT the non-solicitation clause does. This basically means you cannot contact your clients directly after you send a notice that you have changed shops. They have to take the ball from there and open the communication with you.

[jtabosida]

I went through the litgation for this myself. You cannot take away one's livelyhood. Usually non solicitation is outlined in the non compete clause among other things. The only way a non compete will hold up TRULY, is if you were a shareholder in the company and that company was then sold. Or If you were an owner (sole propritorship) and sold the company. In that instance non competes are valid because if they were not then youcould simply move up the block and take your clients with you. I have done the homewrok on this for months prior to our trial. We one of course based on the fact that you cannot take away ones lively hood. One question that was asked was how we came upon these leads.

We were asked this to see if they could say we took company files, etc, I assume. I outlined every client through either phone books or internet. There were other circumstances involved but I dont have the time nor do I really want to explain it all.

Good luck!

[sanddog1]

Sorry Ladybroker but i respectfully disagree, as i have been there done it. I do however agree with jtabosida 100%. You could never go court with prior producer seeking his business clients from another agency, i don't care what agreement you have in place.