Non-solicitation agreements are common provisions included in employment contracts. These agreements prevent an employee from soliciting the business of the company’s clients or customers after leaving the company for a certain period of time. However, the question is, do non-solicitation agreements hold up in court?
The answer is, it depends. Non-solicitation agreements are generally enforceable if they meet certain requirements. For instance, the agreement must be reasonable in scope, duration, and geographic area. The court will examine these factors to determine if the agreement unduly restricts the employee`s ability to work and earn a living.
Scope refers to the type of clients or customers that the employee is prohibited from soliciting. A non-solicitation agreement that prohibits an employee from soliciting any client or customer of the company may be too broad and, therefore, unenforceable. The agreement should be specific and only cover the clients or customers that the employee had contact with or worked with during their employment.
Duration refers to the length of time the non-solicitation agreement will be in effect. The court will consider the length of time necessary to protect the company`s interests. Generally, the duration should not be longer than what is necessary to protect the company`s client or customer relationships.
Geographic area refers to the geographic scope of the non-solicitation agreement. The court will consider the area where the company does business and where the employee had contact with the company`s clients or customers. The agreement should only apply to the geographic area where the employee had contact or worked with the company`s clients or customers.
If the non-solicitation agreement meets these requirements, it is likely to hold up in court. However, if the agreement is too broad or unreasonable, it may be deemed unenforceable.
It is essential for employers to draft non-solicitation agreements that are reasonable and specific. Employers should also provide adequate consideration to the employee in exchange for their agreement to the non-solicitation provision. Adequate consideration may include a signing bonus, a raise, or continued employment.
In conclusion, non-solicitation agreements can hold up in court if they meet certain requirements. Employers should ensure that the agreement is reasonable in scope, duration, and geographic area. Additionally, employees should receive adequate consideration for the agreement. Employers should consult with an attorney to draft a non-solicitation agreement that is enforceable and protects their business interests.