Non-Solicitation Agreements’ Enforceability

Posted on 28 April 2009

Regarding non-solicitation agreements made between an employer and employee, there have been many cases that address their enforceability. Cases addressing this issue have been litigated in both federal and state court. The issue usually boils down to whether the court believes that the non-solicitation agreement unduly restricts the former employee’s right to “make a living” and fairly compete with the former employer. It is essentially a balancing act between the limitation that the clause places on the former employee to earn a livelihood versus the employer’s legitimate right to protect its trade secrets and restrict its former employees’ from interfering with its clients or current employees.

The issue is not one without real world consequences. Many times if an employee leaves a company, especially on bad terms, that employee may wish to go into business for herself, using the experience and skills learned or acquired at her former employer as a means to promote her business or earn a living. Other times this employee may wish to take with her certain employees from the company that she would like to work for her. Also, she may want to solicit the company’s clients to get her business going. In all the these cases, the court will decide whether the non-solicitation clause is narrowly drafted to protect the employer’s interest, or whether it is too broad and unduly restricts the former employee’s right to earn a living. When drafting these non-solicitation agreements, an employer should be cognizant of these precedents and should carefully draft the contract to protect its interests while minimizing the restrictions on the employee.

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This post was written by:

Mark Fabela - who has written 714 posts on Legal Research Center.

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2 Comments For This Post

  1. Dan Frith says:

    Michael: Good post. My firm spends a great deal of time representing Virginia employees fighting unfair and oppressive non-compete agreements. I acknowledge my bias, but non-compete agreements limit innovation and hurt the economy. We write about these issues at Virginia Non-Compete Law Blog located at:

    (http://virginianoncompete.blogspot.com/)

    Dan

  2. Michael Fernandez says:

    Thanks for your input Dan.. I took a look at the site and you have a lot of good stuff on there!! Thanks for coming by.

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