Protecting an agency or buyer from unfair business practices or competition from a former employee or seller who has had access to confidential information and/or paid to establish a relationship for the Agency is not unfair to the employee or seller. They have the right to sell any insurance product to anyone they wish, except for customers they sold to the buyer or for whom they had access to information for which they would not have been privileged if they had not worked for the Agency. The answer to the first question is very straight. If you have a reasonable non-compete clause, which is active at the time of the release of a manufacturer of an agency, this does not prohibit the customer from using the agent they wanted. However, it prohibits the former employee (who participated in the agreement) from accepting the customer for the period agreed by the manufacturer in the non-competition agreement. While customers certainly have free choice, an agent cannot (by the terms of the contract). No agent has ever been „necessary“ to accept a client – even if the client wants the agent`s services. The judge found that the Allstate competition met these requirements: the appointment to the position of exclusive representative was sufficient, the non-competition obligations protected the legitimate interests of the allstate in its customer relations and confidential information, and the one-year period and the one-mile radius were reasonable.  Let us use an example to illustrate how these typical non-competition requirements can apply to an insurance agency. An honorary sale of clients from one agent to another effectively imposes a moral (or even legal) obligation on the seller to assist the buyer in passing the customers. Finally, the value of the intangible asset was based on the seller`s and the buyer`s expectations to pursue a source of customer renewal revenue. Often, part of the purchase of an agency or business book actually involves the seller spending time smoothing the transition to assure the buyer that he or she is receiving the value of the asset that was sold to him.
What for? However, as with any injunction, in order to obtain an injunction, to impose non-competition on an insurance agent, it is not enough for the company to prove that the non-competition clause is enforceable.  The company must also demonstrate that an injunction would be fair. The main question from an employer-worker perspective is: „Does the employer already have the right to prohibit an employee from accounting or otherwise competing after that worker has left the agency that paid the worker for his efforts in creating, creating relationships and/or maintaining an insurance account that is part of the employer`s wealth base?“ In Allstate v. Red, the agent signed an exclusive agency agreement that includes a one-year non-compete clause. One year after his termination, the agent was unable to recruit anyone to compete with Allstate: the most valuable assets that insurance companies „own“ are personal relationships with customers. Accountants call it goodwill. It is literally the „good will“ that a customer has towards a company. In these times of economic hardship, these restrictive alliances may seem harsh because they prevent individuals from finding a job for which they are able to find a job despite careful efforts to find employment. Recent trends show that Pennsylvania courts have more control over non-competition obligations than other types of restrictive alliances, particularly when prevailing economic conditions do not favour job seekers.