Is A Non-Solicitation Agreement Right For Your Company?

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Employees often have access to confidential information as part of their employment. An example of such information is the customer or client list business has developed. To protect this, companies often require their employees to sign a non-solicitation agreement. These agreements are valuable, but it is critical that they are drafted carefully to be enforceable. The New York law firm of Rosenbaum & Taylor can work with you to ensure that your agreement is valid.

Non-solicitation agreements generally prevent an employee from siphoning your customers if he or she leaves your company. This includes a solicitation for the employee’s benefit or for that of a competitor for whom the employee later works. These agreements are similar in many ways to non-compete agreements, which prevent employees from quitting and working for a competitor. However, non-solicitation agreements are aimed at protecting customer and client lists and other proprietary information.

Non-solicitation agreements are sometimes part of a larger employment contract that also includes non-compete provisions. But it can be a standalone agreement. An employer may ask an employee to sign a non-solicitation agreement at any point in the employment relationship. Often, such a request is made when the employee begins working for the company.

 

Businesses that specialize in sales and service commonly use non-solicitation agreements. They are especially desirable for businesses that have a limited customer or client base. The product your company sells, for instance, may have a small customer pool. The non-solicitation agreement protects information that your employees may learn through the normal course of working for your business.

As another example, your company may sell something whose primary appeal is its price. Employees are often privy to the price schedules that make your business competitive among others. It would be reasonable to want to keep a former employee from using that knowledge to take your customers. There are other instances in which you may want a non-solicitation agreement, so ask a New York business law attorney.

Properly drafted non-solicitation agreements can protect your business without infringing on the rights of employees. The agreement cannot prevent an employee from earning a living or pursuing reasonable career opportunities. Some of the more specific requirements of a non-solicitation agreement are:

Legitimate business reason – An employer must have a valid reason to require an employee to sign the non-solicitation agreement. As suggested above, one such reason may be that the company has a valuable customer list. The employee may also have access to other trade secrets that give the company a competitive edge.

Information worth protecting – Companies invest significant time and research into developing customer lists and other proprietary information. These lists may contain non-public information about the customers. But if anyone can readily determine the information (e.g. a customer list), a court likely won’t protect it.

Customers and employees may leave voluntarily – You cannot prevent an employee from leaving your company, or ask him or her to agree not to. No one can really keep a customer from leaving either. However, you can prevent the employee from improperly pressuring customers to leave. Also, you can keep the employee from misusing your company’s non-public information to solicit customers away.

Talk to a skilled New York business law attorney before asking your employees to sign a non-solicitation agreement. Having the correct wording in these agreements is critical if they are later challenged in court. The terms must be reasonable, and employees must understand what they are signing. Also, the exact provisions cannot be unduly restrictive.

Let Us Serve The Legal Needs Of Your Business

Non-solicitation agreements are useful tools for protecting your company’s confidential information. The lawyers of Rosenbaum & Taylor have experience drafting these documents. We understand the investments you’ve made in your business. Let us help safeguard what you’ve built. Call us today to discuss your legal options.

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