Stop client poaching with restrictive covenant — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

Stop client poaching with restrictive covenant

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In tough economic times, companies need to hold onto the customers and clients they have. If your business depends on solid client relationships, now is the time to safeguard those relationships with a restrictive covenant that prevents employees from jumping ship and taking customers with them.

Ask your attorney to draft a solid restrictive covenant that will block client theft.

Recent case: Chad Karasaki signed a restrictive covenant agreeing not to solicit his company’s clients and customers for one year after leaving the company. But when he left, he started poaching clients.

The company sued, asking the court to order Karasaki to stop. Because the agreement he signed was well drafted and not overly broad, the court issued an injunction stopping the client exodus. (Marsh USA, et al., v. Karasaki, No. 08-Civ-4195, SD NY, 2008)

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