The “world” of business is notoriously competitive. As such, retaining hard-won clients is often the key to sustained success in many industries. If you are a business owner and a competitor tries to poach your company’s clients, it can feel like a genuine threat to your company’s operations.
Certainly, one of the best safeguards against client poaching efforts involves building strong, loyal relationships with your clients. Working to ensure that your clients are satisfied with your services or products by providing exceptional customer service, maintaining regular communication and addressing any issues promptly can go a long way. After all, personalized service can make clients feel valued and less likely to be swayed by competitors.
With all that said, you may ultimately feel that you need to take defensive action – in addition to your proactive efforts – if a competitor’s poaching tactics are out of line. If so, several strategies may serve your company’s interests.
Reviewing and enforcing contracts
Many businesses use contracts to protect their interests. Consider reviewing your existing client contracts to clarify whether they include non-solicitation clauses that should prevent your clients from engaging with competitors directly. Additionally, if your employees or former employees are involved in the poaching efforts, you’ll want to clarify whether those contracts include non-compete and non-solicitation agreements. If contractual terms are being violated, you may be able to take action to enforce your rights accordingly.
Sending a cease-and-desist letter
If you have clear evidence that a competitor is actively trying to poach your clients, a cease-and-desist letter from your legal team can be an effective deterrent against further poaching action. This letter should formally request that the competitor stop their activities and outline the legal consequences of continuing their actions. Oftentimes, this effort can resolve a poaching issue without the need for further legal action.
Taking legal action
With that said, if your competitor ignores your cease-and-desist letter, or if their actions cause significant harm to your business, you may need to consider litigation. Possible legal claims include:
- Breach of contract: If there are non-solicitation or non-compete clauses in your contracts, you can sue for breach of contract.
- Tortious interference: This occurs when a competitor intentionally interferes with your business relationships, causing harm. You can claim damages if you can prove this interference.
- Unfair competition: Some jurisdictions have laws against unfair business practices. If the competitor’s actions fall under these statutes, you can pursue a claim.
If a competitor tries to poach your clients, taking proactive and strategic actions to protect your business is wise. Seeking personalized legal guidance is a good way to get started.
