If you’ve worked hard to build your client or customer base, or even put significant time and effort into training your employees or recruiting the right subcontractors, you probably want to protect that investment. Non-solicitation agreements are typically used by businesses of all sizes to ensure that their employees and subcontractors will not solicit (or run off with) the company’s customers, clients, or even other employees or contractors that the company has worked so hard to find and develop in the first place.
The right contract language protecting the investment your business has in its relationships may take the form of a standalone agreement, but it can also be a clause in an existing contract. For example, you might include a non-solicitation clause in an employment or independent contractor agreement. In some instances, we’ve even seen non-solicitation clauses included in operating or partnership agreements to make sure that if a business partner leaves the business, they don’t try to take all of the customers with them!
How does a non-solicitation agreement different from a non-compete or a non-disclosure agreement?
Non-solicitation agreements are often used in conjunction with non-competes and nondisclosure agreements. Together, these types of agreements or clauses are referred to as restrictive covenants--contractual promises that restrict what one (or sometimes both) of the parties to an agreement can do during and even after the agreement terminates. So how do these agreements differ?
Enforcing a Non-Solicitation Agreement
Generally, non-solicitation agreements are enforceable in Ohio. However, they need to be carefully drafted if you actually expect a court to enforce the agreement. Too often, a client will ask us to draft a non-solicitation clause that reaches well beyond protecting the client’s legitimate business interests. Let’s say, for example, that you want to prohibit former employees or contractors from soliciting business from any client that your company has ever done business with. This type of language would presumably extend to customers you haven’t worked with or even interacted with in years. It would even include clients that the former employee or contractor in question has never worked with.
Courts will often treat these types of broad, far-reaching non-solicitation clauses much like non-compete clauses. The court will ask whether the restrictions:
In this example, the non-solicitation language you want would go well beyond what is necessary to protect your business’s interests. It potentially hampers the employee’s or contractor’s ability to work in their given career field, especially if your business has, at one time or another, worked with a significant portion of your target market. If your goal is simply to make someone’s life difficult if they stop working for you, then there’s a good chance your contract language won’t be enforceable.
Non-solicitation clauses, like non-compete agreements, should include reasonable restrictions limiting their scope:
If you have questions about using non-solicitation agreements to
protect your business relationships: