Allstate Non-compete

[njinsgal]

Hi all,

I was a licensed producer for an Allstate agent for 13 years. I am no longer working there and trying to get my head around the non-compete agreement. I will say upfront that I have no list of customers in any way, shape, or form either on paper or electronic. I left the office with my personal belongings and that is it. The agreement says:

For a period of one year following the termination of Service Provider's (me) employment by Agency, Service Provider agrees not to solicit the purchase of products or services in competition with those sold by the Company:
1. With respect to any person, company, or organzation to whom Agency, or any person employed by the Agency, including Service Provider, sold insurance or other products or services on behalf of the Company, and who is a customer of the Company at the time of the termination; or
2. With respect to any person, company, or organization who is a customer of the Company at the time of termination and whose identity was discovered as a result of access to confidential information of the Company; or
3. From any office or business site located within one mile of any locations from which Agency solicited or sold Company insurance or other products or services during the year immediately preceding the termination.

So if I am reading this correctly I cannot solicit prior customers which is absolutely fine. My question is if I set up shop as an independent or as a captive for another company outside the 1 mile radius and do blanket mailing, telemarketing, or other solicitations to the neighborhoods and happen to come across a former Agency or Company customer can I write them? Again, I do not have a list so would have no way of knowing what prospects do or don't have insurance with Allstate. If I am just doing business and not actively going after Allstate customers can they come after me? I do not want to put myself in a situation where I am not following the terms of the agreement but I also cannot just stay home for a year and do nothing either.

Thanks.

 

[xrac]

My understanding is the same as yours. I would go for it but would not establish an office within one mile and would not write anyone whom I discovered has Allstate until after one year.

 

[Josh]

I presume you worked in an Allstate agency vs being an agency principal?

As long as you're not poaching customers you're fine; the courts have consistently ruled that while a non-solicit is acceptable, having a non-compete that effectively drives you out of the business is not worth the paper it's printed on.

Start from scratch at least a mile away and you shouldn't have any troubles, especially if you were working as a producer in an office vs actually running your own agency.

 

[njinsgal]

I presume you worked in an Allstate agency vs being an agency principal?

That is correct, I worked for someone else and have no ownership in the agency. So hypothetically if I come across someone who has either the agency or Allstate for prior insurance you are saying that I should not write them? Even though I did not go after them knowing that they were with Allstate?

Allstate has a large market saturation in my area so that will severely limit my ability to grow. I can completely understand not knowingly soliciting someone with Allstate for a year. I will stay one mile outside the Agency location but I don't see how I can prevent myself from marketing to people that could possibly have Allstate as a whole?

I am not trying to argue, I just want to get my head around this.

Thanks!

 

[Norwayguy]

I presume you worked in an Allstate agency vs being an agency principal?

As long as you're not poaching customers you're fine; the courts have consistently ruled that while a non-solicit is acceptable, having a non-compete that effectively drives you out of the business is not worth the paper it's printed on.

Start from scratch at least a mile away and you shouldn't have any troubles, especially if you were working as a producer in an office vs actually running your own agency.

Noncompetes are legal and binding however you must be compensated for them and your normal commission working as a employee of an agent does not cut it...But I am not an attorney but stayed at a holiday inn once.

 

[pcbinsurance]

Sell some life in the interim and get ready to mail out when you hit the 11 month mark. Date your solicitation 1 yr and 1 day after your termination.

 

[blue_wynd]

Looks like it only said you can't solicit. Nothing saying you can't have former Allstate customers if they are the ones to call you. I would think that a mass mailing wouldn't count as intentionally soliciting former agency clients, so if a client from your former agency happens to call you, you should be ok.

I would personally have a lawyer review it to be sure. Better to spent a few hundred to be sure. If only so you don't have to worry.

 

[njinsgal]

I would personally have a lawyer review it to be sure. Better to spent a few hundred to be sure. If only so you don't have to worry.

Yeah, I am going to. I am going to be setting up a corporation and plan to use an attorney for that so I will ask them to review the agreement. I am a couple of weeks away from that though.

Thank you.

 

[Josh]

That is correct, I worked for someone else and have no ownership in the agency. So hypothetically if I come across someone who has either the agency or Allstate for prior insurance you are saying that I should not write them?

All I'm saying is don't cherry pick through their stuff. It's pretty obvious if you're doing it that way. If one or two people switch and happen to be from the agency you were working with, eh, it happens. If the agent you ere working for loses 5% of his book to you, that's going to cause problems you don't want.

 

[njinsgal]

All I'm saying is don't cherry pick through their stuff. It's pretty obvious if you're doing it that way. If one or two people switch and happen to be from the agency you were working with, eh, it happens. If the agent you ere working for loses 5% of his book to you, that's going to cause problems you don't want.

Thanks, that is what I figured. I have no intention of going after them specifically so I should be fine. I am setting up with the appt with the attorney after I speak with the company that I am looking at and hopefully the Smart Choice & SIAA reps too.