Are you putting together a non-solicitation agreement for your company?

Do you want to learn more on non-solicitation agreements?

Well you have come to the right place!

In this blog we will discuss the detailed elements of what an agreement should have, how it protects businesses, the different types of non-solicitations and more.

So, stay tuned till the end. 

A Non-Solicitation Agreement: What It Looks Like

Drafting contracts such as a non-solicitation agreement can be a simple task. Here is an idea on which section goes where.

SECTION 1: (The Parties Involved) Mentions the names of the parties (Owner and Recipient) involved in the agreement. 

SECTION 2: (The Duration) DON’T FORGET The Start and End Dates of the Non-solicitation Agreement (also referred to as the “Term”).

SECTION 3: (Geographical Limits) Mention the area limitations that apply to the agreement hence referred to as “Geographical limits”.

SECTION 4: (The Non-Solicitation Terms)The specific non-solicitation terms prohibit the following:

• Soliciting key employees, partners, or contractors
• Employees soliciting clients
• Disclosing or misusing the employer’s confidential information and trade secrets

SECTION 5: (Similar Business)This section places a limitation on the employee from working for or with any competitor of the owner.

And if they do work with them…

they are restricted from sharing similar product ideas, services, content, or duties, etc.

Or face the consequences of breaking the agreement.

How Non-Solicitation Agreements Protect Your Business

Employees are their most valuable asset to a business owner.

This agreement safeguards your business.

It restricts ex-employers from using insider knowledge to draw clients away. Protecting client relationships.

Non-solicitation agreements also preserve competitive edge.

It makes sure your business operations remain uninterrupted by the actions of former associates. 

Lastly, having these restrictions attracts investors as they can rest assured that key relationships and assets are protected.

The Different Types of Non-Solicitation Agreements

Types of Non-Solicitation Agreements	Crafted To
Employee Non-Solicitation Agreements	Protect a company’s investment in its employees.Prevent former employees from soliciting current employees.Enforceable restrictions are generally precise and specific.
Customer and Client Non-Solicitation Agreements	Safeguard a company’s valuable relationships with its clientele.Clearly stipulates the conditions under which solicitation is prohibited.
Vendor and Supplier Non-Solicitation Agreements	Ensure the continuity of vendors and suppliers relationships.Includes clauses that prevent former employees from trying to divert suppliers with whom they had contact during their employmentMaintains stability of the business’s crucial supply chain.

Non-Solicitation Agreement: Legal Considerations

First, these contracts must comply with federal, state, and local laws.

So, consulting a legal professional would be the next best step.

Next, the restrictions need to be reasonable. So, focus on protecting only what is most needed. 

Offer valid consideration such as continued employment when introducing the agreement to existing employees.

Keep in mind, the language must be specific and straightforward.

Collect everyone’s informed voluntary consent.

Next, ensure that the non-solicitation terms align with other existing contracts your company uses. This avoids conflicts.  

Lastly, it is crucial that you keep detailed records of these signed agreements.

And update them accordingly to stay compliant with changing laws and business needs.  

Outsource Drafting A Non-Solicitation Agreement

Now, make your legal life even more simple!

Outsourcing legal document drafting services has been trending.

So, leave the drafting to the specialists and focus on your practice and priorities.

How? Well, get in touch with a legal process outsourcing company.

They will assign a virtual legal assistant according to your needs, hoping that they satisfy you with their end of the bargain.

This is budget-friendly and will also give you standard quality output.

Frequently Asked Questions (FAQs)

1. What is a practical example of non-solicitation in a law firm?

A senior associate at a law firm resigns to start their own private practice. The employment agreement they signed includes a non-solicitation clause stating that for two years after leaving the firm, they cannot directly contact or attempt to take clients of the firm with them.

If the associate calls or emails former clients of the firm to invite them to join their new practice, that would violate the clause.

However, the agreement also states: “The Employee may, however, recruit employees whose employment has been terminated or who contact executives on their own initiative.”

This means the former associate is allowed to hire ex-employees of the firm or those who reach out to them voluntarily, as long as no direct solicitation occurs.

2. Are non-solicitation agreements legally binding in every state?

The answer is NO. You must consider the laws of the specific state involved and tailor the agreement accordingly.

3. What is a typical and reasonable duration for a non-solicitation agreement?

One to Three years.

However, it can vary based on the industry, the position, and many other factors. 

4. How does a Non-Disclosure Agreement (NDA) differ from a non-solicitation agreement?

A Non-Disclosure Agreement is a confidentiality agreement. It prohibits the employees and independent contractors from disclosing any confidential information they receive during employment. 

Meanwhile, a Non-Solicitation Agreement stops a former employee from persuading the employer’s customers, prospects, clients or employees from leaving the company and engaging in work with the employee or competitor. 

5. What is the fundamental purpose of utilizing a non-solicitation agreement?

The main idea behind this agreement is to stop self-employed individuals from “stealing” the company’s valuable