Producer non-piracy — securing the book you're buying.

Book ownership is the rep that breaks more deals post-close than any other, and the reason is almost always the same: the agency owns the book on paper, but its producers can legally walk with their clients because the non-piracy agreements are missing, unsigned, or unenforceable. For a buyer, securing the book means verifying the producer agreements actually hold — and where they don't, structuring around the exposure before close rather than discovering it after.

§ 01 · Four elementsWhat makes a non-piracy agreement enforceable.

Four elements make a non-piracy agreement enforceable, and a gap in any one weakens it. An explicit assignment of the expirations and customer relationships to the agency establishes that the agency, not the producer, owns the book. A scoped covenant defines the duration, geography, and customer scope — the best practice runs 24–36 months post-separation, applies to any customer the producer serviced or accessed in their final 12–24 months, and binds regardless of which side initiates the separation. Supporting consideration backs the covenant — employment itself at hire, or fresh consideration (a raise, a promotion) for a covenant signed mid-employment. And current signed copies for every producer — a roster mixing signed and unsigned agreements is an unsecured book hiding in plain sight. A fifth element, a liquidated-damages clause (where enforceable), converts a breach from a litigation-proof problem into a contractual one. The deeper covenant-enforceability analysis is in restrictive covenants.

§ 02 · The unsecured-book responsesFrom repricing to walking.

The buyer's response scales with the exposure, and there's a clean six-step progression from cleanest to most drastic. Remediation before closing is the cleanest — newly signed agreements obtained pre-close, which is the highest-leverage fix. Then a specific escrow holding the at-risk price. Then earnout conversion of the at-risk portion. Then repricing — discounting or excluding the affected commission. Then a carve-out excluding certain producers or books from the transaction entirely. And finally walking, rare and reserved for when the missing legal architecture is genuinely disqualifying. The thresholds anchor the response: an unsecured book at 5% of commission is a pricing issue a buyer can absorb or escrow, while at 40% it's a structural issue that may end the deal, because the buyer would be paying for revenue that can legally walk out the door. The book-ownership rep and escrow mechanics this feeds are in the reps-and-warranties process.

§ 03 · The state-law mapFour enforceability camps.

Enforceability is governed by the producer's own state, which falls into four camps a buyer must map per producer. Broad enforcement of reasonable covenants (much of the Southeast, Midwest, and Mountain West). Statutory frameworks defining standards and remedies (Florida, for example). Non-solicit-only states that enforce non-solicitation but restrict broader non-competes (many states — generally acceptable for agency M&A, since the non-solicit is the load-bearing covenant). And states that restrict or prohibit covenants entirely (California historically, plus others restricting non-competes for lower-wage workers), where the buyer relies on trade-secret, confidentiality, and data-handling provisions instead. In a restrictive state, trade-secret protection of the customer list depends on the agency's operational practices — password controls, management-system access logs, customer-list confidentiality — so documenting those practices is part of the enforceability argument when classical covenants are unavailable. The map matters because a covenant enforceable in one state may be worthless in another, and remote producers are governed by their location, not the agency's.

§ 04 · The consideration gapAnd the three-source ownership flow.

The most common enforceability failure is the consideration gap: a restrictive covenant signed mid-employment without additional consideration is often unenforceable, so a non-piracy agreement a producer signed in 2022 with no associated raise may simply fail — and a buyer's diligence often treats such covenants as unenforceable absent a fresh-consideration cure. The clean fix is to re-sign the covenants with fresh consideration (the transaction itself frequently supplies it), which is why remediation-before-closing is the cleanest response in the progression. Underlying all of this is the three-source book-ownership flow a buyer traces to confirm ownership: the carrier appointment (usually agency-held), the customer account records (usually in the management system), and the producer agreement — and it's the producer agreement where ownership most often fails. A buyer who verifies all three sources, maps each producer to their state, and checks for the consideration gap knows exactly how secured the book is — and can price, escrow, or remediate the gap before the wire rather than inheriting an unsecured asset after it. The HR-diligence view of who owns the book is in book-of-business ownership.

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