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Bryan E. Kuhn
Counselor at Law, P.C.
Business & Employment Law Attorney

What are the 2 kinds of non-solicitation agreements?

The people who work for your company have inside information about how you operate. They get to know your current staff and may also know your clients or customers. Once a worker leaves your company, they can do substantial harm to your business with the knowledge they acquired while working there.

Attempting to leverage the relationships they’ve developed while working for you could leave you at a loss for staff or slowly losing customers and clients. Having your staff members sign a non-solicitation agreement when you hire or promote them can protect you against these kinds of losses. What are the two kinds of non-solicitation agreements that you could have your employees sign?

Non-solicitation of staff members

When one of your employees starts working for another company or starts a competing business, they might try to recruit their former co-workers to join that business. Given that your former employees have insight into the compensation and benefits that you offer, they could help their new employer or company make competitive offers that could tempt your staff members into leaving.

If you don’t protect against such actions, you could lose an entire team of people or find that the best and brightest from multiple different departments all leave to work for the same company. An agreement that prohibits the solicitation of your staff protects you from a former employer headhunting your staff.

Non-solicitation of clients and customers

Some employees will try to take information when they leave your company. They might contact your clients or customers. Creating a non-solicitation agreement prevents this attempt to gain proprietary information.

Like any other restrictive covenant, a non-solicitation agreement is only valid if the worker receives some valuable consideration for signing it. The terms of the agreement will also need to be specific and not vague. Integrating an agreement into your contract that limits the solicitation of clients or customers for a specific amount of time after someone leaves your company can protect you from underhanded actions by the people you hire.

Identifying ways that your employees could damage your company can help you tweak your employment contracts to better protect your business.

 

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