A non-solicitation agreement is a legal contract used by employers to prevent departing employees from soliciting or poaching clients or other employees from the company. But not all non-solicitation agreements are created equal, and some can be more effective than others. In this article, we will discuss the key elements of a good non-solicitation agreement.
Clear and specific language
The language used in a non-solicitation agreement should be clear, specific, and easy to understand. It should clearly state what actions are prohibited and what constitutes a violation. For example, instead of using vague terms like “solicitation,” the agreement should define the term and provide examples of prohibited activities, such as contacting clients or persuading employees to leave the company.
The scope of a non-solicitation agreement should be reasonable and not overly broad. It should be limited to the specific clients or employees that the departing employee had contact with during their employment and not include all clients or employees of the company. The scope should also be limited in time, typically 6-12 months after the departure of the employee.
A good non-solicitation agreement should provide consideration to the departing employee in exchange for agreeing to the terms of the agreement. Consideration can be in the form of a signing bonus, severance pay, or continued employment. Without consideration, the non-solicitation agreement may not be enforceable.
A good non-solicitation agreement should be enforceable under state law. Some states have specific requirements for non-solicitation agreements, such as the need for a legitimate business interest and reasonable restrictions on time and scope. Employers should consult with legal counsel to ensure that their agreement complies with state law and is enforceable.
A good non-solicitation agreement should have clear consequences for violating the terms of the agreement. This could include monetary damages or injunctive relief to prevent the departing employee from continuing to solicit clients or employees. By including consequences for violations, employers can deter departing employees from violating the agreement and protect their business interests.
In conclusion, a good non-solicitation agreement is clear, specific, and reasonable in scope, provides consideration to the departing employee, is enforceable, and has clear consequences for violations. Employers should consult with legal counsel to ensure that their non-solicitation agreement meets these requirements and protects their business interests.