If you work for another person, you usually get in-depth information about the inner workings of that person’s business. This often includes direct interaction with that business’s clients. If you do a great job and develop a rapport with those clients, it’s only natural that eventually one of them may want you to work for them.
This, however, is not in the best interests of your employer. Businesses are all-too-aware of the poaching that goes on with competitors, which is what happens when a company gathers top talent from others in the industry. While they’re limited in what the can do to prevent that, businesses actually can do something to keep their employees from leaving to work for their own clients or starting their own business and luring those clients away. When handled properly, a non-solicitation agreement offers some protection to businesses.
What Is a Non-Solicitation Agreement?
Usually formatted as a clause as part of a bigger employment or work-for-hire agreement, a non-solicitation agreement simply states that you will not solicit a business’s customers after you’re no longer working for the company. This agreement can also include wording that prevents workers from taking other employees or contractors after leaving. The employer can present this agreement for signing at any point before or after work begins.
How to Word a Non-Solicitation Agreement
It’s important to ensure your agreement is enforceable. If you’re in California, this will be tough since the state is notoriously pro-worker in these situations. However, you do stand a good chance of getting results in other states. The key is to be very specific about what violation of the agreement looks like. For example, “The employee will not, for a term of one year after termination of this agreement, approach any customer, affiliate, or business partner of this business for the purpose of soliciting employment or business arrangements.”
Limitations of Non-Solicitation Agreements
Even in states where non-solicitation agreements are enforceable, it has to be reasonable for the courts to rule in the employer’s favor. The employer needs to show that the customer list was a small, protected group, not a pool of tens of thousands of random shoppers in a store. There also needs to be a good reason behind having the agreement in place, such as the specialized trade secrets a former worker would have that might become compromised when working with competitors.
Although a non-solicitation clause can protect an employer, it’s important to make sure it’s enforceable and is in place for good reason. Otherwise, it may scare away the potential workers who are being asked to sign it when it wouldn’t have held up in a court of law anyway.