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Why do employers have workers sign non-solicitation agreements?

On Behalf of | Jul 20, 2023 | Employment

Most workers have a written contract with their employers, and those contracts impose obligations on both parties while employment arrangements remain active, as well as some obligations that may persist for several years after the relationship ends. Restrictive covenants are common inclusions in modern employment contracts that continue to have authority after someone ends a job. Especially when someone works as a manager, executive or other highly paid professional, their employer may want to prevent them from harming the company after they leave their position.

Many people have heard of non-compete agreements, which prevent someone from starting a competing business or going to work for one for a certain amount of time after ending a job with an employer. People are also often generally familiar with non-disclosure agreements, which prevent a worker from sharing details about how a company operates or other important trade secrets. Fewer people are familiar with non-solicitation agreements, which are also popular restrictive covenants. What can a non-solicitation agreement prevent a worker from doing?

Former workers cannot reach out to their contacts associated with their job

The primary purpose of a non-solicitation agreement is to prevent an employee from abusing the professional connections that they develop during their employment to undermine a company’s operations. The specific language that the employer includes in the contract will determine what impact it has.

Sometimes, the primary objective of a non-solicitation agreement is to keep an employee from attempting to lure clients or customers away from a company after they leave. Otherwise, anyone in a managerial or sales position could potentially leverage the relationships they develop during their employment to harm the business that offered them a job.

It is also possible for a non-solicitation agreement to specifically prohibit any attempt to recruit co-workers for a job at a business they started or a company that recently hired them. Non-solicitation agreements, like other restrictive covenants, typically can only last for a set amount of time and require that the person making concessions receives something of valuable consideration for signing the agreement. Often, the job offer is that valuable consideration.

Understanding the clauses that employers include in their employment contracts may facilitate negotiations during the onboarding process and can clarify for a worker and a business alike whether or not future economic activities might lead to a lawsuit.