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How can you avoid breaching a nonsolicitation agreement?
In many industries, professionals accumulate customers over the years who are devoted to them more than the company they work for. When these professionals leave their employers for another company or to start a business, their customers often want to follow them. If that happened regularly, it could destroy a company.
That’s why many companies require their employees to sign nonsolicitation agreements. These state that if they take a customer away from the business, they can be sued. Some nonsolicitation agreements apply to other employees as well. They state that if a person leaves the company, they can’t entice other employees to come with them.
There are two types of solicitation: direct and indirect. Direct solicitation is easier to spot and act on. If an accountant leaves a firm to start his own business and calls or emails his clients asking them to switch firms, that’s direct solicitation. If a marketing director leaves her company to start her own and asks the best copywriters there to join her, that too is direct solicitation.
Indirect solicitation can be more difficult to define and prove. It can involve going through a third party to bring over a client or employee.
Is advertising a new company or seeking job applicants in a public forum indirect solicitation? It might be. However, courts have ruled that this isn’t a breach of a nonsolicitation agreement on the part of the former employee.
If you start your new business and send out a group email to a number of potential clients and your old clients are among them, that’s likely to be a problem. For one thing, client lists and information belong to the company.
As a business owner, it’s essential to carefully draft your nonsolicitation agreement (or nonsolicitation language included within another agreement). You want to minimize room for doubt.
These agreements, like other business contracts, also need to be reasonable. For example, as in the example noted above, you can’t prohibit former employees from advertising for customers or job applicants. That’s why it’s crucial to draft these agreements in consultation with an attorney.
If you believe someone has violated your agreement or you’ve been accused of violating an agreement, it’s essential to seek legal guidance. If you have any doubt about whether actions that you’re contemplating are a violation of an agreement you’ve signed, it’s also wise to have an attorney review the agreement.