Some employers ask their employees to sign non-solicitation agreements as a part of larger documents or as stand-alone agreements. These agreements are contracts in which employees agree that they won’t solicit their employers’ clients for their own benefit after they leave the companies. They may also include provisions that the workers will not solicit other workers to leave after they have left their jobs. Like other types of employment contracts, it is a good idea for you to talk to the attorneys at Swartz Swidler before you sign a non-solicitation agreement.
When do employers use non-solicitation agreements?
Non-solicitation agreements are often used in sales and service companies. They are especially common when the pool of customers is small. Employers that do not have a limited number of customers for their products may still use these agreements if they sell common products with which they compete on price. In these cases, former workers who understand the company’s method of pricing may understand exactly how good an offer has to be to take customers away.
Enforceability of non-solicitation agreements
Some states such as California do not allow non-solicitation agreements while others do. In states in which these agreements are enforceable, they will generally be allowed as long as they don’t make it too hard for workers to earn an income or to attract customers or employees through legitimate ways.
Non-solicitation agreements must meet several requirements to be enforceable. Your employer must have a valid reason for asking you to sign the agreement such as protecting trade secrets or other valuable information. If the agreement is to protect a customer list, the list must be one that the company has spent money and time to compile. It must also have information in it that is not readily accessible by the general public.
Non-solicitation agreements that are meant to prevent workers or customers from moving on to a competitor on a voluntary basis are not enforceable. Companies can’t use these agreements to prevent other employees from leaving their companies to work with a coworker at a new company as long as the coworker didn’t solicit them to do so.
What to do if your employer asks you to sign a non-solicitation agreement
It is important for you to carefully review any non-solicitation agreement that you are asked to sign. You should ask questions if you do not understand something. Talk to the attorneys at Swartz Swidler if you think that it will restrict your options too severely once you leave your job. Contact us today to schedule your consultation by filling out our contact form.
