Proprietary information is a nuclear topic when dealing with salespeople who are leaving a company. Product info, service plans, actual costs vs. pricing are all hot topics. But for sales, the one thing that keeps managers up at night is the security of the customer list.
We see many companies who desire to hire a salesperson from the competition with the expressed hope that the salesperson will bring customers with them. Quick note-it rarely happens, but that doesn’t stop companies from focusing their hiring strategy.
CNNMoney.com provides an article that discusses the legalities of this approach. In the article is a phrase that I have not encountered before – garden-leave clause. The explanation:
Greco also advises anyone changing jobs to read the paperwork carefully – both what they signed at their old job and what a new employer is asking them to sign. A growing trend: So-called garden leave (or gardening leave) clauses, which require an employee to give at least 90 days’ notice of his or her departure, during which time the employee must stay home and avoid all contact with customers. (Hence the name: You’ll have time to do plenty of gardening, or whatever else floats your boat.) The purpose of a garden leave is to give your employer a head start in trying to hold on to your clients before you begin working at a different firm.
Interesting approach and one that seems to have some legs based on this generational point:
Young people especially now have an expectation of moving around a lot from one firm to another,” notes Greco. “So it’s important to be aware of these kinds of employment agreements that can really slow you down.”
In sales, we often see the 1 year non-compete agreement which has some impact, but truly is difficult to enforce. This garden-leave clause, if enforceable, should give companies the time they need to solidify their customer list before competitive pressure from the departed salesperson begins.