What is non-solicitation of clients?
A nonsolicitation agreement is a contract in which an employee agrees not to solicit a company’s clients or customers, for his or her own benefit or for the benefit of a competitor, after leaving the company.
What is a reasonable non-solicitation clause?
What Is a Non Solicitation Agreement? A non-solicitation agreement is a common contract clause that says if you work for a competitor, you won’t solicit any business clients, bring over any employees, or use any confidential information connected to your current job.
How do I get around a non-solicitation agreement?
Escaping Nonsolicitation Agreements
- Don’t sign.
- Build your book independently.
- Carve out pre-existing relationships.
- Require “for cause” termination as the trigger.
- Provide for a payoff.
- Turn clients into friends.
- Don’t treat clients as trade secrets.
- Invest in your own business.
What is the difference between non-compete and non-solicitation?
A non-compete agreement bars a former employee from competing against a former employer for a specified amount of time. The non-solicitation agreement is a less restrictive contract and is narrowly aimed at preventing an employee from soliciting his or her former employer’s clients.
How enforceable is a non-solicitation agreement?
To be enforceable, non-solicitation agreements must abide by certain rules: Valid business reason. Protecting trade secrets, client lists, and employee-poaching are all considered legitimate reasons to have an employee sign a non-solicitation agreement.
Do non-solicitation agreements hold up in court?
Like non-compete agreements, however, non-solicitation agreements are only enforceable if they are reasonable. Courts have upheld the validity of non-solicitation agreements that cause a former employee to move to another city or state in order to work in the same field and avoid violating the agreement.
What should a non-solicitation agreement include?
The quality and quantity of contact between the former employee and clients, workers and suppliers. The strength of the former employee’s connections with or influence over clients, workers and suppliers. The length of time that it would take for a new employee to develop similar connections or influence.
How enforceable is a non-solicitation clause?
Non-solicitation clauses are only enforceable where they protect legitimate business interests and are drawn as widely as is reasonable. Generally, the court will look at what timescale the employer needs to protect its business. Six months is generally accepted to be a reasonable amount of time.
What does it mean to solicit a client?
Soliciting business means seeking the business of potential customers. The term usually refers to directly asking potential customers to purchase goods or services, rather than using advertisements. Freelance contractors and other independent business owners often engage in solicitation to seek new customers.
