Non-Competition and Non-Solicitation

Non-Competition and Non-Solicitation

What are non-competition and non-solicitation agreements?

Non-competition and non-solicitation agreements are common terms of employment that are intended to protect your employer's business interests after your employment ends. Non-competition agreements try to prohibit you from doing business in your employer's industry, region and/or with its clients for a certain period of time after the employment relationship is terminated. Non-solicitation agreements usually prohibit you from contacting your employer's clients or employees for business purposes after your employment ends. 

Why do I need legal advice on my non-competition or non-solicitation obligations?

As any employment lawyer will tell you, terms of employment are not always what they appear to be. The presence or absence of non-competition and non-solicitation clauses in your employment agreement can be misleading. Some employees, called "fiduciary employees" can be bound by non-competition and non-solicitation obligations even without a corresponding clause in their employment agreements. Whether or not you are a fiduciary employee is something a court will consider on a case-by-case basis, but generally only very senior employees or those who are the public face of the company are considered to be fiduciaries. 

With a detailed review of your employment agreement, an employment lawyer can help you understand what your non-competition and non-solicitation obligations are (if any), how you can stay in compliance, and which activities might put you in breach.

Are non-competition agreements enforceable?

Luckily for employees, the vast majority of non-competition agreements are unenforceable. Courts resist upholding any agreement which they view will put a restriction on an employee's ability to earn a living. Only non-competition agreements which set very clear and very reasonable limits (for instance, geographically and temporally) are enforceable. Without those clear and reasonable limits, the court will simply treat the non-competition agreement as if it does not exist. 

Are non-solicitation agreements enforceable?

Non-solicitation agreements, on the other hand, are much more routinely enforced by courts, so long as the restriction is considered "reasonable", and the employee can determine, only by reading the agreement, which individuals and companies it may not solicit. Each contract is different - we can advise you on the enforceability of your employment contract with a detailed employment contract review.

What are some other reasons why non-competition or non-solicitation agreements may not be enforceable?

There is a myriad of other reasons that a court might decline to enforce non-solicitation or non-competition obligations. For instance, if those obligations are based on an employment agreement, they may be unenforceable if you did not sign the relevant agreement before you started employment. The circumstances at the end of your employment are also relevant - if you have been wrongfully dismissed by your employer, the court may be less willing to uphold an agreement that would limit your ability to find other work.

I am being sued for breach of non-competition or non-solicitation obligations.  What do I do?

Contact an expert employment lawyer immediately. If your former employer has sued you for breach of non-competition or non-solicitation obligations, they face an uphill battle. They must establish that the obligations exist, either by virtue of a contract or your fiduciary status, that you have breached those obligations, and lastly, that they have suffered damages (or that you have benefitted) as a result. 

What can Hyde HR Law do for me?

The lawyers at Hyde HR Law are experts on non-competition and non-solicitation agreements. We draft non-competition and non-solicitation agreements for our employer clients, which gives us the expertise to pick apart poorly drafted agreements to defend our employee clients. We can help you understand your non-competition and non-solicitation obligations, whether you're negotiating a job offer or your employment has come to an end. We will also vigorously defend you in the event you are sued for breech of non-competition or non-solicitation. Contact us today.