What’s mine is mine! – Bringing your clients with you after you leave your employer.

I have a three year-old niece who, like most kids her age, thinks everything belongs to her no matter what it is. Don’t get me wrong, she is the sweetest girl out there, but she’s three, so naturally everything belongs to her. The last time we were visiting with her, she grabbed my blackberry, yelled “Mine”, and frowned when I took it from her a few minutes later. Suddenly, I got an idea for this post. I started thinking about who an employee’s clients actually belong? More specifically, in the state of Washington, if a client was a customer of the employee before the employee was hired by the Company can the employee take the client with him or her when they leave the Company?

Since I practice law in Washington I naturally looked at our state’s case law, but couldn’t find a case on point to answer my question. I expanded my search to other states and found two relevant cases, one in Illinois and the other in Missouri. In 2001, an Illinois’ court found that an employer has no protectible interest in an employee’s customers unless the employer can show the employee would not have had contact with the customers absent his association with the employer. Com-Co Ins. Agency, Inc. v. Service Ins. Agency Inc., 748 N.E.2d 298, *302 (2001). I interpret this to mean that in state of Illinois, that when an employee leaves their employer he or she can bring their clients with him as long as that person brought them to the company at the time they were hired. In addition to this Illinois case, I also found a Missouri case that held the exact opposite. Naegele v. Biomedical Systems Corp., 272 S.W.3d 385, *389 (2008).

So now the question remains, would the Washington court follow Illinois or Missouri? My opinion is that a Washington court would follow Illinois, and here’s why. The backbone of decisions regarding non-competes are that the agreement must be reasonable. In fact, a court in WA will not enforce a non-compete or a provision of the non-compete if it results in an unreasonable outcome. This would be the case if the state followed the Missouri case law. Think about it, in Missouri an employer can hire a salesperson, have them bring their clients to the company, terminate the employee right after the hire date, and prevent the employee from contacting the same clients that he or she brought to the Company. Sounds unreasonable to me, and I think the Washington courts would agree. Therefore, I believe that the Illinois holding discussed above would be adopted by a Washington court.

In the end of it all I guess my niece, i.e. the company, doesn’t get to keep something if it doesn’t belong to them in the first place. Sorry Bailey, but I’ll buy you some M & M’s to make up for it.