Can You Work for Someone Who Signed a Nonsolicitation Agreement with Your Employer?

When considering new employment opportunities, it’s essential to be mindful of any legal agreements you have signed with your current or former employer. Non-solicitation agreements are one such legal contract that restricts employees from soliciting clients, customers, or other employees from their current or former employer. If you find yourself in a situation where you are contemplating working for someone who has signed a non-solicitation agreement with your employer, it is crucial to understand the implications and potential consequences. This article aims to shed light on this matter and provide some guidance.

Understanding Non-solicitation Agreements

A non-solicitation agreement is a legally binding contract that is typically entered into between an employer and an employee. The purpose of this agreement is to prevent employees from actively soliciting or poaching clients, customers, or other employees from their current or former employer for a certain period, usually after the termination of employment. The agreement aims to protect a company’s goodwill, relationships, and confidential information.

Enforceability of Non-solicitation Agreements

The enforceability of non-solicitation agreements can vary based on jurisdiction and specific circumstances. In general, courts tend to scrutinize such agreements, particularly if they impose restrictions that are overly broad or unreasonable in terms of geographic scope, duration, or the type of solicitation restricted.

While laws governing non-solicitation agreements differ between countries and even states within the same country, there are some common factors courts consider when assessing the enforceability of these agreements. These include:

  1. Reasonableness: The agreement should be reasonable in terms of the duration and scope of the restrictions. Courts are more likely to enforce agreements that are limited to a specific period and geographic area, as well as a specific class of customers or employees.
  2. Legitimate business interests: The agreement should be designed to protect the employer’s legitimate business interests, such as trade secrets, confidential information, customer relationships, or specialized training provided to the employee.
  3. Public interest: Courts also consider the impact of non-solicitation agreements on public interest. If an agreement excessively limits an individual’s ability to seek employment or restricts healthy competition in the job market, it may be deemed unenforceable.

Working for Someone Bound by a Non-solicitation Agreement

If you are considering working for an individual or company that has signed a non-solicitation agreement with your current or former employer, it is crucial to take a few steps to mitigate potential risks:

  1. Review your own non-solicitation agreement: Carefully review any non-solicitation agreement you have signed with your current or former employer. Understand its terms, duration, and scope of restrictions.
  2. Seek legal advice: Consulting an employment attorney familiar with the laws in your jurisdiction can provide you with a clearer understanding of your rights and obligations. They can assess the enforceability of the agreement and provide guidance on how to proceed.
  3. Analyze the scope of the non-solicitation agreement: Assess whether the new employment opportunity you are considering would violate the specific terms of the non-solicitation agreement. If the new position involves directly soliciting clients or customers from your current or former employer, it could potentially breach the agreement.
  4. Evaluate potential consequences: Consider the potential consequences of breaching the non-solicitation agreement. Your current or former employer might take legal action against you, seeking damages or an injunction to prevent you from engaging in activities that violate the agreement. Assess the risks involved before making any decisions.
  5. Negotiate or seek a release: In some cases, it may be possible to negotiate with your current or former employer to obtain a release from the non-solicitation agreement or modify its terms. Professional mediation or discussions with both parties involved could help reach a mutually acceptable solution.

Conclusion

Working for someone who has signed a non-solicitation agreement with your current or former employer requires careful consideration. Non-solicitation agreements aim to protect a company’s interests, and violating them can have legal consequences. To navigate this situation, it is crucial to review your own non-solicitation agreement, seek legal advice, analyze the scope of the agreement, evaluate potential consequences, and explore options for negotiation or release.

Remember, laws regarding non-solicitation agreements can vary, so consulting with an employment attorney who is knowledgeable about the laws in your jurisdiction is highly recommended. They can provide you with specific advice based on your circumstances and help you make informed decisions about your employment opportunities while ensuring you remain in compliance with any contractual obligations you have.

Video Transcript

Can I Work for Someone Who Has Signed a Solicitation Agreement with My Employer?

All right. So this is actually a question from an employee, not an employer. I usually represent employers, but sometimes, I represent CEOs and other company leaders, and they may be an employee who didn’t sign a non-compete agreement or a non-solicitation agreement, but their employer may have.

So here is the setup. The employer has an employee. And that employee signs a non-solicitation agreement. What that means is if the employee leaves for a period of time, the employee will not solicit other employees, customers, or other parts of the business. So that employee leaves. Now that an employee starts a new business competing with the employer, that is okay because we are not talking about a non-compete agreement. A non-compete agreement says you can’t compete, but the employee didn’t sign that. The employee signed a non-solicitation agreement. That says, “I will not solicit employees or customers who are working with the business but still can compete.” So that employee leaves and starts competing with her former employer. So as she’s working and building this company, competing with her former employer, now she decides she wants to hire an employee from the employer who is currently working for the employer and that is the person who is asking the question.

Implications for Former Colleagues Starting a New Venture

So he is asking, “I haven’t signed a non-compete or a non-solicitation. Can I go work for my former co-worker? She is building a new company, but she has signed a non-solicitation agreement. Is that okay?” The answer is no, you cannot even though you have not signed it, and here is why. She signed the non-solicitation agreement. Because she signed the non-solicitation agreement, she is not allowed to employ you. And so, if she did, she would be breaching her contract with her former employer. And if you accepted that employment, you would be interfering with that contract. Your work with somebody would result in that person breaching a contract. You are deemed to be tortiously interfering with the contract.

What Is Tortious Interference?

Tortious interference means although you have not broken a contract, you have interfered with a contract in a way that is illegal. Your participation in a relationship has resulted in a breach. And if you know of that, then you are liable for tortious interference. Let’s break that down for a second. Tortious comes from the word tort. A tort is a type of legal claim. What are other torts? Negligence, assault, battery, conversion, there are all sorts of different torts. One of them is tortious interference. And that basically means that you are unlawfully interfering in another contract. So, to summarize, if you want to go work for somebody who has signed a non-solicitation agreement with your current employer, which says she cannot employ your current employer’s employees for a period of time, then you cannot go work for her until the term expires in the non-solicitation agreement. You would be engaging in unlawful activity. And even though you signed no contract, somebody else signed that contract, the person you want to work for. You cannot legally go work for them.

What Happens if Someone Violates a Non-solicitation Agreement?

Let’s walk through that question. Imagine you have a non-solicitation agreement between an employer and a former employee. So the employee was working with the employer and then left and started her own company. She signed a non-solicitation agreement. Now let’s assume she hires one of the employees or one of the customers of her former employer. In some way, she breaches the non-solicitation agreement. Assuming she does, what happens next? The employer can sue the employee who left and the person who is now working for her or working with her. Now, I should clarify something. If an employee goes to a new employer, and that employment violates the non-solicitation agreement, the employee is only liable once they know of the violation or once they know that they are working there is a violation of the non-solicitation agreement. If you don’t know, you are not liable.

So what usually happens when an employee is hired in violation of a non-solicitation agreement is the employer sends a letter, a cease and desist letter, to the new employer and the employee and says, “This relationship you have is in violation of our non-solicitation agreement, and you must immediately cease and desist unlawful activity (that is an activity in violation of the non-solicitation agreement.).” So usually, there is a cease and desist letter sent first, but not always. The employer doesn’t have to send a cease and desist letter first. They can just sue. But usually, because of the expense and time involved in a lawsuit, a cease and desist letter is sent first. That is much less expensive from a legal standpoint than hiring an attorney. And it gives both the parties an opportunity to change their behavior and comply with the non-solicitation agreement. If they refuse to comply, then the employer needs to decide, “Is it worth suing?” Many times then, the employer, will in fact, sue. So what happens if somebody violates a non-solicitation agreement? Usually, there is a cease and desist letter sent first, but it is not required. And then second, the former employer can sue both the employee who left, and the new employer for breach of the non-solicitation agreement.

Conclusion

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