Non-compete and non-solicitation agreements are frequently used in employment relationships between employers and employees or contractors, and it’s used by all sizes of businesses, firms, and organizations. The consequences of ignoring or misinterpreting these agreements can be severe and may result in intricate legal disputes.
Without competent, qualified counsel, a company’s earnings and reputation could suffer significant damage, or an individual might meet challenges in finding quality employment. It is important to understand the basics of these agreements in order to know when it is time to seek legal advice.
What is a Non-Compete Agreement?
A non-compete agreement is a legal clause in a contract dictating that an employee or contractor is not permitted to compete with their employer during the term of employment and/or once that employment has ended.
Additionally, these agreements typically forbid the employee from disclosing or revealing confidential or proprietary information to other parties at any point during the employment or even after it has ended.
What is a Non-Solicitation Agreement?
An employee is forbidden by a non-solicitation agreement from contacting a company’s clients or customers in order to acquire something after having left the company they once represented.
Non-solicitation agreements are also used to prevent a former employee or contractor from poaching the company’s employees/contractors to leave the company and work for the former employee/contractor.
What are the Goals of These Agreements?
Overall, these agreements serve as a method of protection of trade secrets and confidential information.
In general, non-compete agreements are used to regulate the behavior of former employees, and non-solicitation agreements are used to protect the employer’s existing relationships with their clients, customers, and employees.
Non-Competes
By design, non-compete agreements prevent employees from working for a competitor of their former employer or establishing their own competing business. The scope and duration of the agreement varies, depending on the nature of the business and the level of the former employee’s involvement.
The limitations imposed by the agreement may apply within a specific geographical area, such as within the state or 50 miles of their former employer’s office. The duration of the agreement can range from several months to multiple years, depending on the circumstances of the agreement.
Non-Solicitations
Non-solicitation agreements are designed to protect the employer’s clients, customers, and employees from being solicited by former employees.
What are the Limitations of These Agreements?
While both non-compete and non-solicitation agreements serve as a mechanism for protecting the employer, they are not without their limitations. The agreements must be reasonable in both scope and duration.
Companies must weigh their options before implementing these types of agreements because of the increased risk of legal challenges, the impact they may have on attracting potential employees, and the potential of redundancy with confidentiality verbiage that already exists.
These agreements, when reasonable in scope and duration, offer protection to companies from former employees’ competing with them or using confidential information.
Seek Legal Counsel
Whether you represent a company or are a future of current employee dealing with these types of agreements, it is important to understand the details and limitations of these documents. Consulting with an attorney is the best course of action.
With the help of Apfelbaum Law, you can ensure that you have an advocate to walk you through the legalities of the agreement you have questions about. Contact our office to have an experienced attorney advise you on your specific needs.
