Unusual wording in agency contracts. I Need Advice

[backinthebiz]

I have an opportunity to contract with an agency that sets Medicare Advantage plan appointments for you, at least 3 a day. It sounds pretty good with nice commissions.

My concern is that their agency contract has some odd wording about not soliciting their own agents or employees to leave the agency or soliciting their clients to discontinue their business with the agency.

Now this is all fine, I have no intent to steal agents/employees or clients. But the contract says you will acknowledge that soliciting an agent or employee to leave the agency can cause damages of $250,000 and soliciting a client to discontinue business with the agency can cause damages of $1,000. Does this mean the agency has the right to fine me $250,000 or $1,000 if I'm accused of stealing agents/employees or clients? That sounds strange to me.

Does anyone have experience with legal rights regarding agency/agent contracts?

Thanks!

 

[Mr. Bill]

Re: Unusual wording in agency contracts, need advice.

I do believe that damages would have to be proven. They simply can't make it up. However, if it's a contract, it's a contract. Why not just shop around? There are plenty of people on the board who've given good ideas about marketing this stuff.

 

[backinthebiz]

Re: Unusual wording in agency contracts, need advice.

There is a lot of great advice on the boards! But the free leads, pre-set appointments, and advance commissions is perfect for where I'm at in my career.

 

[myinsurebiz]

Re: Unusual wording in agency contracts, need advice.

I have an opportunity to contract with an agency that sets Medicare Advantage plan appointments for you, at least 3 a day. It sounds pretty good with nice commissions.

My concern is that their agency contract has some odd wording about not soliciting their own agents or employees to leave the agency or soliciting their clients to discontinue their business with the agency.

Now this is all fine, I have no intent to steal agents/employees or clients. But the contract says you will acknowledge that soliciting an agent or employee to leave the agency can cause damages of $250,000 and soliciting a client to discontinue business with the agency can cause damages of $1,000. Does this mean the agency has the right to fine me $250,000 or $1,000 if I'm accused of stealing agents/employees or clients? That sounds strange to me.

Does anyone have experience with legal rights regarding agency/agent contracts?

Thanks!

I wouldn't sign that agreement.

Tom

 

[Mr. Bill]

Re: Unusual wording in agency contracts, need advice.

Oh, I also forgot to tell you,

This may be a case for our dear friend Pre-Paid Legal to clear up!

 

[Crabcake Johnny]

Re: Unusual wording in agency contracts, need advice.

Pass. Whoever wrote that contract is a wad

 

[HomeService]

Re: Unusual wording in agency contracts, need advice.

the last I heard, you had to have appointments set for you in MA plans, by law, no door knocking. as far as recruiting and churning business goes.... if these people did not have a problem recruiting agents and keeping the business, that stuff would not be in there. it tells me there are problems. most contracts have some sort of non-compete or non-churning, but to name damages like that, that is nuts. what if you cause 2.2 meeeelion dollars in damage and they cut their own legs off at the knees - right there?

 

[joshril]

Re: Unusual wording in agency contracts, need advice.

BS contract... Non-competes are rarely enforceable and that's why they put that stuff in there.. They probably know they can't afford nor intend to sue if you violate the contract.

 

[flauto-insurance]

Sound to me like your an inside job. a spy or recruiter and your true intention is to steal employees. thats why your so worried!

 

[backinthebiz]

Any spy or recruiter should be able to steal employees without going through all the trouble of contracting with an agency first...

Anyways, I agree that in CA non-competes are not enforced by the court. I've worked for an insurance company that had shady managers who accused agents of wrongdoing just to make them look bad. I guess that makes me worry of being falsely accused of something and signing an agreement that agrees to these specific damages.

Other than that, the contract is fine. It's a very informally typed contract, obviously needs an attorney to rewrite it. I understand the agency wants to shield itself from their agents/customers getting taken. Maybe they've been burned before.