Today’s onboarding process is significantly more complicated and time-consuming than in days gone by. Years ago, a new employee was essentially shown where to find their desk, the bathroom, and the lunchroom and then set to work, but now they often spend an entire week going through orientation training and completing piles of paperwork. If you’re about to start a new job, you’re likely to find either a non-compete or a non-solicitation agreement amidst the forms you’ll be asked to review, fill out and sign. Though it’s easy to just agree to everything and move on, it’s a good idea to understand exactly what it is you’re agreeing to. Here’s what you need to know about non-compete and non-solicitation agreements, and the difference between the two.
Both non-compete and non-solicitation agreements are contracts that businesses use to protect themselves against the potential fallout of employees’ departures. While a non-compete agreement generally prohibits an employee from working in the same industry or position for a specific period of time or within a defined geographic area, non-solicitation agreements are less restrictive, specifying that departing employees are not permitted to pursue the company’s customers — and sometimes their employees.
The use of non-compete agreements has become controversial in recent days. Because the terms that they contain are so frequently overly broad or unreasonable, these contracts are often viewed as interfering with the employee’s ability to work anywhere, and as a result, they have been ruled unenforceable by the courts.
By contrast, the terms of non-solicitation agreements tend to be much narrower and more clearly defined. The employees that are asked to sign non-solicitation agreements also tend to have very specific titles and responsibilities compared to generic non-competes that some employers ask every employee to sign. As a result, non-solicitation agreements have a much better chance of being viewed as enforceable by the courts.
If you are an employer who is trying to ensure that you don’t lose customers when the salespeople you’ve trained and supported depart, then you need a well-crafted non-solicitation agreement. For help in putting together documents that protect you and will be viewed as enforceable by the courts, contact us today to set up a time to meet.