Non-compete contracts have received substantial scrutiny and criticism of late, leaving many employers concerned about competitive vulnerability should the use of the restrictive covenants be prohibited. Non-solicitation agreements offer an excellent alternative that provides significant protection in the face of employees’ departing to work for competitors.

A non-solicitation agreement is frequently incorporated into the larger employment contract that outlines both the employer’s and the employee’s responsibilities to one another, but the specific terms regarding non-solicitation are clearly for the protection of the employer’s interests. They specify that upon leaving the company, the employee agrees that they will not solicit any of the company’s clients or customers for their own benefit or for the benefit of any other entity. In many cases, the non-solicitation agreement may also prohibit the employee from recruiting other employees to leave when they do, whether to go to a new employer or simply to leave the company.

The need for a non-solicitation agreement is generally limited to situations in which the employee is in a sales or service position within a business that has a clearly defined and limited pool of customers. A company that specializes in selling advertisements to hospitals and healthcare facilities would be at significant competitive risk if a top salesperson left them to work for a competitor that does the same: the relationships that the employee established, as well as their inside knowledge of the original employer’s pricing and marketing strategies, would provide them with a substantial advantage.

Unlike the non-compete agreements that have been criticized for putting an undue burden on employees, restricting their ability to earn a living, non-solicitation agreements are specific to an industry and an individual business. There is nothing to stop a talented salesperson from applying their skill to a new product or service that is purchased by an entirely different clientele.

If you are interested in crafting a non-solicitation agreement to protect your business interests, there are certain elements that must be in place in order for the agreement to be enforceable. In the face of an employee violating its terms, you must be able to establish that there was a valid business reason for putting the terms in place. In order to ensure that your document’s language serves its purpose, contact our experienced business law attorneys today.