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How non-solicitation agreements can protect employers

On Behalf of | Jan 21, 2025 | Employment Law For Employers |

Employers hiring or promoting workers typically negotiate contract terms with those individuals. The main focus of negotiations in many cases is compensation. Workers want competitive wages and benefits packages.

However, secondary terms in employment contracts can be equally important. Employers filling well-compensated roles often expect the workers they hire to make certain concessions during the onboarding process. Frequently, employment contracts include restrictive covenants.

These contract inclusions help protect the company from the employee’s future behavior. Many employers require non-compete agreements or non-disclosure agreements from their workers. An increasing number have begun integrating non-solicitation agreements into their contracts as well.

What function does a non-solicitation agreement serve?

A non-solicitation agreement relates to work relationships rather than trade secrets or job opportunities. A non-compete agreement can prevent a worker from starting a business in the same industry or taking a job with a direct competitor who operates locally. A non-disclosure agreement can prevent an employee from sharing non-public information about the company.

A non-solicitation agreement prevents them from misusing the relationships they developed while working for the business. Non-solicitation agreements can protect employers in two distinct ways. The first is by preventing a former worker from copying a client or customer list and attempting to sell to them later.

They cannot solicit business from parties that they came into contact with through their employment with the organization. That alone can make a non-solicitation agreement very important when companies need to add someone to their sales, management or executive teams.

The second function of a non-solicitation agreement is to prevent a former employee from attempting to poach their co-workers or subordinates. They cannot attempt to lure the people they know through their employment arrangements away for a job at a company they started or with a business that recently offered them an employment opportunity.

Non-solicitation agreements protect the trade secrets that make companies competitive and the talent that helps make them profitable. Provided that employers integrate them into valid employment contracts, non-solicitation agreements can be powerful tools to deter misconduct on the part of employees after they leave their jobs with the company.

Recognizing the various ways that employees can endanger company operations may help business owners and executives integrate the right protections into their employment contracts. Non-solicitation agreements are among the many useful contract inclusions that companies may want to consider adding to their employment agreements for optimal protection.

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