November is the perfect month to pause and reflect on everything for which we are thankful. Family, friends, food, and football (for some of us) usually top the personal lists. Think about your business, though. What are you thankful for with respect to your company?
Something many business owners don’t fully appreciate until they really need it is a non-solicitation agreement. Non-solicitation agreements are one of the most common restrictive covenants commonly included in employment agreements. Other common types include non-compete, non-disclosure/confidentiality, and anti-raiding agreements.
Non-Solicitation Agreement, Defined
A non-solicitation agreement is, foremost, a restrictive covenant—an agreement not to do something. An employee who signs a non-solicitation agreement agrees not to solicit their current or former employer’s customers for a competing business venture. The principle of a non-solicitation agreement is that, in exchange for a paycheck and work experience, an employee should be expected not to reasonably harm the employer.
At its core, though, a non-solicitation agreement is a restraint on free commerce. The worker subject to the agreement is prohibited from doing otherwise perfectly legal actions. This means that employers must have good reasons for compelling employees to sign a non-solicitation agreement.
Florida law requires non-solicitation agreements to protect at least one legitimate business interest, such as trade secrets, customer goodwill, or specialized training. The main purpose of most non-solicitation agreements is to prevent employees from poaching valued customers and clients.
As with other restrictive covenants, non-solicitation agreements must be reasonable in the geographic area. Your company probably could not prevent a former employee from starting another candle-making business on the other side of the country if you don’t even operate outside your home state.
The non-solicitation agreement must also be reasonably time-limited. Even if an employee wants to start a competitor to your business, you cannot prevent them from doing so indefinitely. Six months or less is usually acceptable to Florida courts, but you might be able to get away with two years.
Why Should You be Thankful For Non-Solicitation Agreements?
Simply put, compelling employees to sign non-solicitation agreements can be a good way to protect customer goodwill you’ve worked so hard to cultivate. While you couldn’t develop these relationships without your employees, you also provided the infrastructure and information needed for your workers to thrive.
Over the years, your employees have obtained inside looks at your customers’ needs and motivations. This information could not be gleaned by simply looking in from the outside. Because your employees got exposure to your company’s proprietary information, courts and legislators have decided that it would be unfair for an employee to use that proprietary knowledge the minute they leave your company.
The bottom line is that non-solicitation agreements can help you grow and innovate your business with confidence. As long as the agreement is in writing, you have a legal avenue to go after an employee who breached the agreement.
Implementing non-solicitation agreements and other restrictive covenants is much more complicated than the general knowledge included in this blog might lead you to believe. The best way to protect your business through restrictive agreements is to contact a knowledgeable Florida business attorney. Trembly Law Firm is ready to serve you and help you achieve your long-term business goals.