Understand the non-solicitation agreements critical to your business, and your career.
Non-solicitation agreements limit how employees and contractors can approach a company’s business contacts. Such restrictions prevent workers from soliciting employees and contractors that still work at the company, or the company’s existing and potential customers and business partners. Non-solicitation agreements are sometimes also referred to as non-compete agreements, especially when they limit solicitation of customers.
Non-solicitation restrictions can be a critical tool for employers to protect their staff, clients, and important contacts, such as valuable suppliers and contractors. They can also have a significant impact on the career of employees and independent contractors, especially if the provision restricts which customers the employee or contractor can pursue.
How we help employers
We work with companies to draft non-solicitation provisions for new employment agreements, stand-alone agreements, and separation and release agreements. We smartly tailor the restrictions to each company’s needs, decreasing the risk that such important protections will be held unenforceable in arbitration or litigation.
How we help employees and independent contractors
We work with employees and independent contractors to review and negotiate the terms of any proposed non-solicitation agreement. Those restrictions may be presented in employment and independent contractor agreements, stand-alone agreements, or separation and release agreements. For clients who are already bound by non-solicits, we analyze those existing restrictions for vulnerabilities under the law, so we can advise employees and contractors on their options moving forward.
Challenging non-solicitation agreements
Employees and contractors often challenge non-solicitation agreements in arbitration or litigation. We advise clients on their likelihood of success, and represent clients if they need to initiate or defend such challenges.
Non-solicitation agreements are restraints on trade, so they are often “disfavored” by courts. While every state has its own test for whether a non-solicitation provision is enforceable, it often comes down to some form of the same question: Is the restriction reasonable?
Courts may approach that question from different angles:
- Is the restriction narrowly tailored to protect a legitimate business interest?
- Does it apply to specific clients, or try to broadly prevent competition?
- Does the restriction last too long, or cover too large a geographic area?
- Does it unfairly prevent the employee from earning a living?
What type of solicitation is prohibited?
A non-solicitation agreement may prohibit both oral and written communications, and does not always depend on who initiated the contact. As with any contract, the parties’ obligations will be governed by the actual language to which they agreed.
If you are preparing a non-solicitation agreement, or assessing whether and how you are bound by such a restriction, you may want to consult an attorney to help you interpret that language and advise as to how a court may assess the contract’s enforceability.
For information purposes only. Not legal advice.