Introduction
Non-solicitation agreements are legally binding contracts designed to prevent one party from soliciting the employees or business clients of another. They’re frequently used when a company is planning to sell its assets, such as a merger or acquisition. But non-solicitation agreements aren’t just for big businesses: they’re also common in employment contracts and partnership agreements. In this blog post, we’ll go over everything you need to know about this type of arrangement. If you need more information on specific aspects of non-solicitation agreements, check out our other articles about them here on The Legal Side!
What is a Non-Solicitation Agreement?
A non-solicitation agreement is an agreement that prevents a former employee from soliciting the business of the company’s clients. The term “non-compete” refers to the fact that some states have restrictions on what types of agreements are allowed, but these agreements are still referred to as non-competes by many people.
For example:
- A salesperson may be required to sign a non-solicitation agreement when joining an organization so he or she cannot take clients with him or her when leaving his or her current job. This could be considered unfair if it prevented someone from being able to find work because they were not allowed to work in their field at all!
Common Documents with Non-Solicitation Clauses
- Contracts with vendors and suppliers.
- Contracts with employees.
- Contracts with investors.
- Contracts with clients (e.g., non-compete agreements).
Non-Solicitation Agreement Enforceability
Non-Solicitation Agreements are a type of agreement that restricts an employee from working for a competitor after leaving the job. These agreements are enforceable if they are reasonable in scope and duration.
The reasonableness of non-solicitation agreements depends on a few factors:
- What is the geographic scope of the restriction? Are you restricted from working anywhere within 50 miles, or just within your city or state? What about 10 miles? A mile? It may seem like a small difference, but it can make all the difference when deciding whether or not to sign such an agreement.
- How long does it last? If someone has been working for six months at one company before being offered another job elsewhere, does it make sense for them not be able to take that offer because they signed an NDA when they joined their current employer five years ago? Probably not!
Who Signs a Non-Solicitation Agreement?
In general, non-solicitation agreements are signed by employers and employees. However, they can also be used to protect the interests of business partners and customers. In these cases, it’s important to make sure that the language in your contract is clear so that everyone knows what they can and cannot do after they leave your company or stop doing business with you.
Conclusion
Non-Solicitation Agreements are important to have in place when you want to protect your business from competition. They can also be used to ensure that employees don’t take trade secrets or confidential information with them when they leave the company. If you’re looking for help drafting one of these agreements, contact us today!