What Is a Non-Solicitation Agreement?
Written on September 19, 2019
Many Florida business owners rely upon restrictive covenants to protect company interests and assets, including non-solicitation agreements that safeguard relationships with customers. At its core, this type of clause is a contract, so many of the concepts of contract law apply regarding formation and breach. However, there are special rules regarding non-solicitation agreements under Florida’s law on valid restraints of trade. Unless it’s properly crafted according to the statute, you won’t be able to enforce the provisions.
You can trust a Clearwater contracts lawyer to assist with developing a restrictive covenant that suits your needs, but an overview of non-solicitations agreements may be helpful.
Purpose of a Non-Solicitation Agreement:
In the context of employment, a non-solicitation clause is a contract that restricts an employee from approaching or doing business with the employer’s customers upon leaving the company. Companies invest time, money, and resources to develop solid relationships with their customers. They also go to great lengths to maintain confidentiality regarding their customer lists. A non-solicitation agreement prevents employees – who have access to customer information – from leaving their positions and then reaching out to these customers on behalf of a competitor.
Rules Regarding Enforceability:
The legal obligations created by a non-solicitation agreement are restraints of trade because they limit the former employee’s ability to work in his or her chosen profession. Employers cannot create a broad, expansive contract that essentially prevents the employee from ever working in the relevant industry ever again. Instead, a non-solicitation agreement must meet a two-part test to be enforceable by the employer:
- The company must have a legitimate business interest that it seeks to protect through the non-solicitation agreement. A customer list or other confidential information would qualify.
- The clause must be reasonable in terms of duration and scope. There’s not a set number of years that would meet this test, because this factor is very case-specific. A two-year period after leaving employment might be reasonable in one situation, whereas six months might be acceptable under different circumstances.
Scope is also a fact-specific factor, so what is considered reasonable – and, therefore, enforceable – will depend on the business and industry. For example, a non-solicitation agreement may meet this standard by prohibiting the employee from talking to customers within Pinellas County or all of Florida.
Enforcing Non-Solicitation Agreements:
As with any restrictive covenant, contract disputes often arise when the employee leaves and breaches the terms of a non-solicitation agreement. If you’ve carefully crafted the language with the assistance of an attorney, it’s possible to enforce the agreement through legal action. A business litigation lawyer can assist with a lawsuit for monetary damages and equitable relief – such as an order requiring the former employee to cease and desist.
A Clearwater Contract Law Attorney Can Advise You on Non-Solicitation Agreements
Crafting an enforceable restrictive covenant can be challenging, which is why Florida business owners should trust the task to an experienced business lawyer. Our team at Clearwater Business Law can advise you on the legal requirements, and we’re willing to assist if legal action becomes necessary. Please call (727) 785-5100 today to schedule a consultation today.