Non-Solicitation Agreements: What Employers Need to Know

A non-solicitation agreement is a legal document that prevents one party from soliciting the employees or customers of another party. In the employment context, non-solicitation agreements are often used by employers to protect their business interests by preventing former employees from poaching their customers or recruiting their employees.

While non-solicitation agreements can be an effective tool for employers, they must be drafted carefully to ensure that they are enforceable and do not violate the rights of employees.

Here are some key points that employers should keep in mind when drafting or enforcing non-solicitation agreements:

1. Reasonable Scope

Non-solicitation agreements must be reasonable in scope to be enforceable. This means that they should be narrowly tailored to protect the legitimate business interests of the employer. For example, an agreement that prevents a former employee from contacting any customer of the employer, regardless of whether the employee had any prior relationship with the customer, may be overly broad and unenforceable.

2. Consideration

To be enforceable, non-solicitation agreements must be supported by consideration. This means that the employee must receive some benefit, such as a bonus or a promise of continued employment, in exchange for agreeing to the terms of the agreement.

3. Geographic Limitations

Non-solicitation agreements should also be limited geographically. This means that they should only apply to the specific geographic area where the employer does business. For example, an agreement that prevents a former employee from soliciting customers anywhere in the world may be overly broad and unenforceable.

4. Time Limitations

Non-solicitation agreements should also have a reasonable time limitation. This means that they should only apply for a specific period of time, such as 6 months or a year, after the termination of employment. An agreement that prevents a former employee from soliciting customers or recruiting employees indefinitely may be overly broad and unenforceable.

5. Enforcement

Finally, employers should take steps to enforce their non-solicitation agreements. This may include sending letters to former employees who are violating the terms of the agreement, filing lawsuits, or seeking injunctive relief in court. Employers who fail to enforce their non-solicitation agreements may find that they are unenforceable in the future.

In conclusion, non-solicitation agreements can be an effective way for employers to protect their business interests. However, they must be drafted carefully to ensure that they are enforceable and do not violate the rights of employees. For more information on non-solicitation agreements, employers should consult with an experienced attorney.