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I'm thinking of leaving my full-time job and working in the same field as a freelancer. Would it be a bad idea to pitch my freelance services to my current company's clients? I know how much my company charges them, and I could do the same work for about 50 percent less, while still making considerably more money myself than I do in my current job.

There is no no-compete language in my contract with the company, so I don't see any legal reason why I couldn't do this. But I wonder if there could be reputatational or ethical issues at play. I don't want to get a bad reputation within my industry because my current company muddies my name if it finds out I quit and started competing against it. I also worry that the clients could view me negatively if I told them I'd left the company and proposed working for them as a freelancer.

I imagine this is not a rare situation. Plus, it seems totally normal to move as an employee from one company to a competitor, which is similar to but not quite the same as what I'm thinking about doing. But I frankly just don't know what the expectations are of someone who leaves a company and goes to work for himself or herself, either from my company's perspective or its clients' perspective.

I'm in the United States, for what it's worth.

  • 1
    Alternatively you could ask for a raise, or ask to switch to contract/consultant with your current customer – Oxymoron Dec 9 '18 at 18:56
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It would be unethical, and you do not want to be known for this type of behavior. If there's a significant chance of the community becoming aware of this / if it's a small enough space, I would avoid doing anything like this on a large scale.

Though perhaps not illegal if you don't have any 'non-compete' clauses in your contracts...

Keep in mind, though, you very likely are bound to one or more confidentiality clauses, most companies will include this in their onboarding paperwork.

This means you should keep information like their current rates (if private), vendors, other trade secrets private....

Additional Note: If you have to ask if something is ethical or not, very likely others will question it the same way you have.

This is the impact this action may have on others who learn of this practice if you move forward with it.

  • I agree on the part that in smaller communities it quickly becomes a severe trust issue,I disagree that it is unethical.For instance there might be only very few companies that could be his clients and most likely they'll all be clients of is employer.He'd be unable to work.Besides,laws regulating business practices are created because by nature companies may/do behave detrimental to competition,they have to put their company first.Competing with former employers and using advantages gained during his employment status is very promising for his business,with risks of alienating some. – DigitalBlade969 Dec 10 '18 at 21:35
  • @DigitalBlade969 that there may only be a few companies needing that product/service is an illustration of why it's unethical, it may be confidential information - That knowledge of which companies need/may be in the market for that product/service, + that he could undercut their rate, knowing it, may not be public information, and would provide him with an advantage that other businesses wouldnt have, one thats also inherently detrimental to the business hed be stealing these customers from. Taking customers from the business using their own private information is what makes it unethical – schizoid04 Dec 10 '18 at 22:38
  • Granted.... Whether it's unethical or not, you should consider the scope of the impact of doing it.... while it might be unethical, if you're talking about a massive organization with thousands / millions of clients, poaching one or two is a drop in the bucket, but if it's a small business you're leaving and you take a significant portion of their business using this information, you're causing a greater detrimental impact to that business and I would imagine it's more morally wrong / more unethical at that point. – schizoid04 Dec 10 '18 at 22:43
  • true and if he'd render the company bankrupt and all employees unemployed he'd have one less competitor and a cheaper worker market.so ultimately he'd be doing the best for his own, now thriving company.which is why business is as cut throat and merciless as the laws allow... one persons unethical behaviour is someone elses ethical, most prudent course of action in the best interest of the company,its shareholders and yes,even its employees feeding their children.oh the humanity...(; – DigitalBlade969 Dec 10 '18 at 22:59
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In the USA, your company’s client list is most likely a trade secret, and what they are charged is quite definitely a trade secret. You will very likely end up in court. Worst case with a criminal conviction, best case with a huge bill for your lawyers.

And this has nothing to do with non-compete agreements. You can contact potential clients that you don’t know through your ex- company.

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    I highly doubt that.He'd be in trouble if he'd divulge that information to third parties.Offering services to the clients of his former employer will only be a problem if his contract has no compete clauses.THAT's why they are in contracts in the first place because by law there is otherwise nothing preventing him to compete.On the contrary, it is allowed, even desired (see competition / antitrust laws) !! – DigitalBlade969 Dec 10 '18 at 21:29
  • @DigitalBlade969 Client list and contract details are very likely trade secrets. And whether you sell them to a competitor, or become a competitor yourself, won't make a difference. It has nothing to do with non-compete clauses. – gnasher729 Dec 11 '18 at 23:48
  • well, not in all countries and even in the USA only apparently 42 states have adopted the "Uniform Trade Secrets Act" that enforces what you say. So obviously there is a lot of disagreement on the legal level. – DigitalBlade969 Dec 12 '18 at 0:07
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[...]There is no no-compete language in my contract[...]

In that case you can do that, sure.

It is a free market after all.

However, as you said, poaching clients will not go over well with your current employer or potentially their client, so prepare for heavy sailing onwards indeed.

But:
Are you certain you really can deliver the same service for half the price to the current clients in the same or similar quantity, quality and time?!

...a one man band vs a company with how many other employees exactly?

Depending on what is more important for the client, they may opt for you if price solely is the primary factor or they may keep working with the company if other considerations are more or equally important to them while putting you on Santa's naughty list.

If the relationship between the client and the company or a manager is close, they most likely will not go for your cheap offer either.

If the client has other dealings with your current employer besides what you can offer them, you're probably also out of luck.

EDIT:
There apparently is a "Uniform Trade Secrets Act" adopted in 42 U.S. states that regulates the use of trade secrets and some argue that a client list is a trade secret.

Please refer to the following link that is listed in Dans answer. https://www.entrepreneur.com/article/167128

Seek legal advice if you want to win your current employers clients.

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I have to disagree with the answer that this is illegal at least in the USA. It's not even unethical unless you are actively attracting clients by stating you're going freelance and they will save by going with you during your employment. Matter of facts, courts agree with this.See this link on taking customers with you.

This idea is no different than any other business. Take for example a beauty spa or gym. These frequently have clients who like particular employees and it is common that when those employees leave, the clients go where the favorite employees go be it a competing business or their own personal company. It's completely impossible to tell customers they can't follow their favorite employee to a different location.

  • I’d suggest you re-read that link you posted, as there are some significant caveats mentioned in the article that you don’t mention in this advice... – Gwyn Evans Dec 10 '18 at 20:35
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Contacting your ex-employers clients is unethical. I think you know this. What isn't unethical is your ex-employers clients contacting you.

So, while you're still working for the employer, make sure you make LinkedIn connections with the employer's clients (other business networks are available. Probably). Then, when you go freelance / self-employed, make sure you post lots on LinkedIn about how you're now freelance and available, and able to work for better rates than corporates.

It may or may not work. If the clients come - good. If they don't - uh-oh! But at least it's ethical.

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