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Non-Solicitation Agreement

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Definition:

A non-solicitation agreement restricts an individual (usually a former employee) from soliciting either (a) employees or (b) customers of a business after leaving the business.

Employees
Good employees are difficult to find, and a company may have spent many years training a valuable employee. The employer wants to prevent another employee from leaving the company and soliciting that valuable employee to leave and join the new company. Many companies require managers and professionals to sign non-solicitation agreements to prevent this type of situation from happening.

Customers
In the same way, an employer may want to prevent a former employee from soliciting customers to draw them away from the business. This situation happens in sales and also in professional practices, with clients or patients.

Issues in Non-Solicitation Agreements
Some issues to note:

  • It is difficult to prevent someone from voluntarily leaving a company to join another company.
  • It is also difficult to prove solicitation
  • In the case of customers, some companies attempt to prohibit "indirect" solicitation, which could mean advertising or publicity. This restriction makes it almost impossible to advertise a new business without risking the violation of a non-solicitation agreement.
  • Sales people, personal services employees, and brokers have a difficult situation if they leave a company. Taking a customer list can be considered a violation of a non-solicitation agreement, but not taking the list means not having any customers.

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