Some business owners will require their employees to sign a non-solicitation agreement. Read all about this type of contract and what it entails below.
A non-solicitation agreement is a contract, typically between an employer and an employee, that governs the employee’s right to solicit customers or employees of the business after they leave their current position. In most cases, the employee has to agree not to solicit customers for a certain duration of time after leaving their current job.
Why Should You Hire Attorneys for Non-Solicitations?
The use of a non-solicitation agreement can be very beneficial to business owners. However, they have to be well-drafted and not overly restrictive to be useful. A qualified and experienced attorney can help to ensure that your non-solicitation agreement is effective.
Common FAQs about Non-Solicitations
The purpose of a non-solicitation agreement is usually to protect the customer list of a company from being used by their competitors. These lists are very valuable to business owners as most of them would have invested a huge amount of time, energy and resources into establishing and building relationships with their customers. It would be very detrimental for the company if their hard-won customers were to be solicited by their competitors.
Non-solicitation agreements are typically used in sales or service business when there is a small customer pool. However, even companies who have many customers may want a non-solicitation agreement if the products or services they sell are not unique and they compete mainly by price. This is because an employee well-versed in the company’s pricing schedule would have advantage in soliciting the company’s customers away.
A non-solicitation agreement is likely to be enforced if it does not prevent an employee from earning a living or unfairly restrict a competitor’s ability to hire employees or attract customers. To be enforceable, the agreement has to fulfill a few criteria. Firstly, the employer must have a valid business reason such as protecting an important customer list or a trade secret. Secondly, the legitimate interest must be worth protecting. For example, in the case of a customer list, the company must have spent time, energy and resources to establish it. Lastly, the agreement cannot prevent an employee, client or customer from moving to a competitor voluntarily.
The length of such an agreement generally depends on the terms agreed on by the employer and the employee. Most agreements typically last about a year.
They are two different legal entities. A non-compete agreement restricts employees from collaborating with competing companies and from working for a competitor in their next position. However, non-compete and non-solicitation agreements can both appear in the same employee contract.
Choose Carcich O'Shea, LLC for Experienced Employment Law Attorneys
We at Carcich O’Shea, LLC have had many years of experience in employment law in New York and New Jersey. We are more than qualified to help you if you require aid in drafting an effective non-solicitation agreement. In the event that a non-solicitation agreement has been violated, you also count on us to fight for your rights and to do our best to protect you.
If you have more questions about our legal expertise in non-solicitations, feel free to contact us today. Alternatively, you may call us at 201-988-1308 or send an email to email@example.com.