Is there a non-compete clause for the customers that we bring in?

We have seen requests such as: “Customers of our company, onboarded in the solutions provider legal entities, should not be reached for any other business/service/product related matter different than the one provided by our company, during the time of the agreement and at least 3 years after its dissolution or finalization. Customers should be contacted for any other service or product by our company only.”

Almost no solution provider will agree to this clause (at least the ones we work with). If they provide licensing coverage, technically and legally, the client belongs to them. Putting this clause is in contravention to the MTL requirements and obligations they have from their state, the federal authorities, and especially from BSA and CFPB angle.

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This page was last updated on February 9, 2023.

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