Agreements can protect your customer base, but the law varies a lot. Here is the basic picture.
In this article
- Protecting your customers when people leave
- Noncompete vs nonsolicit
- The law changes by state
- Nonsolicit is often more practical
- Confidential information
- Control the data
- Retention beats contracts
- Company relationships
- Exit process
- Where to start
- Important note
- Common mistakes
- An example
- Frequently asked questions
- Frequently asked questions
Protecting your customers when people leave
When a technician leaves and takes your customers, or starts a competing company down the street, you lose years of relationship building. Noncompete and nonsolicit agreements are tools to reduce that risk, but the law varies a lot.
Noncompete vs nonsolicit
A noncompete limits working for a competitor or starting one. A nonsolicit limits contacting your customers or employees.
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The law changes by state
Some states, such as California, generally do not enforce noncompetes for employees, and federal rules have been the subject of litigation. Many states limit them by duration, geography and pay level. Ask an employment attorney.
Nonsolicit is often more practical
Agreements focused on not soliciting your customers are often easier to enforce than broad noncompetes.
Confidential information
Customer lists and pricing can be protected as confidential information.
Control the data
Keep customer data in company systems, not personal phones.
Retention beats contracts
Fair pay, growth and respect keep good techs better than any agreement.
Company relationships
Make the company the customer's relationship, with office follow-ups and branded communication.
Exit process
Remove access to systems the same day and remind departing staff of their agreements.
Where to start
Have a local attorney review your current agreements before relying on them.
Important note
This is general information, not legal advice.
Common mistakes
Copying a template from the internet, asking for a broad noncompete from low-wage employees and never reviewing it. An agreement that cannot be enforced gives false security.
An example
A departing tech signed a nonsolicit agreement. On the last day, the office removes system access, collects the company phone and reminds him of the agreement. The customers continue receiving maintenance reminders from the company, not from him.
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Frequently asked questions
Are noncompete agreements enforceable for technicians?
It depends on the state. Some states generally do not enforce them for employees, and others limit duration and scope. Ask an employment attorney.