Contracts to stop an ex-employee from poaching a company’s clients need to be carefully worded.
A post-employment solicitation restraint is a clause in an employment contract that seeks to ensure employees leaving a company do not take the company’s existing clients with them.
This generally means an employee is forbidden from advertising or soliciting custom from former clients, but what is the legal situation when it’s not clear if there was direct solicitation involved?
A personal trainer worked at a sports centre as an independent contractor. When she left their employment she began working for a rival gym franchise. The franchise offered discounted membership rates to people the trainer had coached previously, including those whom she had trained while at the sports centre.
The personal trainer also posted various messages on her Facebook page advising her Facebook friends of the various agreements and deals with her new employer.
As her original contract with the sports centre prevented her from soliciting work from the centre’s customers for three months after her work with the company ended, the sports centre took her to court seeking redress.
At trial the judge found the wording of the personal trainer’s contract meant that there was no restriction on who she could train, so long as those who sought her services were unaffected by her solicitation or canvassing efforts. The difficulty for the sports centre came in proving that the customers the personal trainer took with her had knowledge of, or were influenced by, her canvassing efforts online.
The personal trainer was ordered to take down any postings on Facebook that could entice customers away from the centre and into her new workplace, but ultimately kept the clients that had followed her from the sports centre already.
Post-employment solicitation restraints drafted as part of employment contracts can be complex.
For advice on appropriate wording of employment contracts consult your solicitor.
Published by the Law Society of New South Wales