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A primer on non-solicitation agreements

You have put immeasurable time and effort into procuring the right customers and employees for your business. You recruited the top talent in your field because you knew that your company would be only as strong as its employees. Then, you painstakingly built a roster of reliable, loyal clients who have made your business what it is today. So, when one of your employees leaves your company and takes one of your clients with them, you are understandably upset. 

A non-solicitation agreement can help prevent poaching between employees and clients. We’ll go over the basics of non-solicitation agreements and why you may wish to include one in your future business contracts.

What is a non-solicitation agreement?

Non-solicitation agreements are a type of restrictive covenant that are often incorporated into business contracts to prevent someone from poaching employees or clients. When a former employee tries to persuade his former company's staff or customers to leave and work with him, it is called solicitation. Some business contracts will reserve a clause or two for non-solicitation language, while others will devote entire documents to it.

Issues with non-solicitation agreements

To be enforceable, a non-solicitation agreement’s limits must be reasonable. If issues do arise regarding a non-solicitation agreement, it is usually due to a signatory who feels that the contract’s restrictions are too narrow. Many courts will not uphold non-solicitation agreements that impose unreasonable restrictions on a former employee.

Enforcing the agreement may be difficult in itself. After all, employees can choose to leave a company and join a former colleague of their own free will. Demonstrating to a court that a former employee solicited another can be very difficult; it may take a skilled business attorney to prove solicitation. Despite how difficult it may be to enforce non-solicitation agreements, many business owners consider it worthwhile to include them in their business contracts.

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