Clauses prohibiting the solicitation of a company’s clients are legal and enforceable in Washington state. These are usually part of a non-competition clause written into an employment contract.
The following are the standard points included in the language of a general non-solicitation of clients clause. Clauses used in actual employment contracts will vary depending on the needs of the company, but every agreement contains at least the following requirements:
- He or she must not divulge the name of any individual client of the company’s to any party outside the company.
- He or she must not solicit or otherwise contact clients of the company without written permission from the company.
- He or she must not do anything that could interfere with the business relationship between the company and its business-related associates, such as discuss the company’s current financial state or any of its personnel, encourage the client to work with another company or otherwise give any of the company’s clients, vendors, business associates or service providers a reason to cease their relationship with the company.
- The penalties for violating any requirement within the clause
Non-solicitation of clients clauses are most commonly used in sales or service businesses because their income is often tied to the direct relationships they build and maintain with their clients. Every state has unique laws regarding these and other types of non-compete clauses that may be included in employment contracts. When these and other forms of non-compete clauses are used, however, they must be determined to be reasonable. Otherwise, they are invalid and unenforceable. In Washington, Chapter 49.44 RCW lists the laws regarding employment contracts and their violations.
Determining a Non-Solicitation of Clients Clause’s Validity
The employer’s reason for requiring the employee to sign the agreement. There are many valid reasons to create non-solicitation of client agreements, as well as some invalid ones. The following reasons are generally considered to be valid:
- The client list has a monetary value. This means that the company has spent a significant amount of money cultivating the list through employee salaries and specialized research and marketing.
- The client list is worth protecting. Some client lists are more custom-built than others. A non-solicitation of clients clause may be considered valid if the company’s client list can be proven to contain important, valuable information rather than simply a list of walk-in customers.
Additionally, the clause must include language that states that customers and employees may leave the company as they wish. Although non-solicitation clauses can prevent an employee from actively steering clients to another service provider, they cannot forbid clients from seeking another provider on their own.
Non-Solicitation Clause Attorneys Can Help
The world of non-solicitation and non-competition clauses is complicated. Many seemingly minute details determine the validity of a clause and can affect what a company may and may not require of its employees and clients. If you want to know more about non-solicitation of client clauses and how one can affect your company or your work, call HKM Employment Attorneys LLP at 206-838-2504. Our experienced team of employment lawyers can help you make the best decisions for yourself and your business.