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A non-solicitation agreement letter is a legal document that prohibits employees from soliciting clients or customers of the employer for their gain after leaving the company. This type of agreement is common in industries where customer relationships, such as sales, consulting, and financial services, are essential to success. In this blog post, we will provide a sample non-solicitation agreement letter, explain how to write one, and discuss some important considerations to remember.
What is Non-Solicitation Agreement?
A non-solicitation agreement is a legal contract between an employer and an employee that prohibits the employee from soliciting the employer’s clients or customers for a certain period after leaving the company. The purpose of a non-solicitation agreement is to protect the employer’s business interests by preventing former employees from using the knowledge and relationships gained during their employment to lure away clients or customers.
Non-solicitation agreements are typically used in industries where client, customer, and employee relationships are critical to the business’s success, such as in sales or consulting. They are also commonly used in industries where employee turnover is high, and there is a risk that departing employees may take clients or customers with them when they leave.
Non-solicitation agreements differ from non-compete agreements, which prohibit employees from working for a competitor after leaving the company. While the courts generally disfavour non-compete agreements, non-solicitation agreements are generally more accepted as they restrict employees’ ability to find work in their field.
Sample of Non-Solicitation Agreement Letter
Sample 1:
| [Employer Name] [Address] [City, State ZIP Code] [Date] [Employee Name] [Address] [City, State ZIP Code] Dear [Employee Name], As a condition of your employment with [Employer Name], you have access to and knowledge of valuable information regarding our clients and customers. To protect our business interests and confidential information, we require that you agree to the following terms and conditions: Non-Solicitation of Clients and Customers During your employment with [Employer Name] and for a period of [time frame], you agree that you will not directly or indirectly solicit, contact, or communicate with any clients or customers of [Employer Name] to offer them any product or service that competes with those offered by [Employer Name]. Non-Solicitation of Employees During your employment with [Employer Name] and for a period of [time frame], you agree that you will not directly or indirectly solicit or recruit any employee of [Employer Name] to hire them for any other business or enterprise. Confidentiality and Non-Disclosure You acknowledge and agree that you have had access to and knowledge of confidential and proprietary information belonging to [Employer Name], including but not limited to customer lists, trade secrets, pricing information, marketing strategies, and financial information. You agree to keep this information confidential and not to disclose it to any third party without the express written consent of [Employer Name]. Remedy for Breach You acknowledge and agree that a breach of this non-solicitation agreement will cause irreparable harm to [Employer Name] and that monetary damages may not be an adequate remedy. In case of a breach, [Employer Name] shall be entitled to injunctive relief and any other remedies available at law or in equity. Governing Law and Jurisdiction This agreement shall be governed by and construed in accordance with the laws of the state of [state]. Any dispute arising out of or in connection with this agreement shall be subject to the exclusive jurisdiction of the courts of [city/county], [state]. Please sign and return the attached copy of this agreement to indicate your acceptance of these terms and conditions. Sincerely, [Employer Name] |
Sample 2:
| Dear [Employee Name], We are writing regarding the non-solicitation agreement you signed as part of your employment contract with [Company Name]. This agreement protects our business interests and confidential information from being shared with competitors or used for personal gain. We want to remind you that the non-solicitation agreement prohibits you from directly or indirectly soliciting any of our clients, customers, or employees for a period of [Insert time frame, e.g., two years] following the termination of your employment with us. Additionally, you are not allowed to disclose confidential information about our business or operations to anyone outside our company. We take the enforcement of this agreement very seriously, and any breach of this agreement may result in legal action against you. Therefore, we kindly request that you review and acknowledge your understanding of the terms and conditions of the non-solicitation agreement by signing and returning the attached copy of this letter. We appreciate your cooperation and commitment to upholding the terms of your employment contract. If you have any questions or concerns regarding the non-solicitation agreement, please do not hesitate to contact us. Thank you. Sincerely, [Your Name] [Company Name] |
How to Write a Non-Solicitation Agreement Letter?
When drafting a non-solicitation agreement letter, it is important to be clear and specific about the terms and conditions of the agreement. Here are some key elements to include:
Parties to the Agreement
Identify the employer and the employee who is entering into the non-solicitation agreement.
Duration of the Agreement
Specify the time for which the non-solicitation agreement will be in effect. This could be for a certain number of months or years after the employee’s termination date or for a certain period after the employee leaves the company.
Scope of the Agreement
Clearly define the scope of the non-solicitation agreement. This should include a prohibition on soliciting clients or customers of the employer, as well as a prohibition on soliciting employees of the employer to hire them for another business or enterprise.
Confidentiality
Include a provision that requires the employee to maintain the confidentiality of any confidential or proprietary information they can access during their employment. This could include customer lists, trade secrets, pricing information, marketing strategies, and financial information.
Remedy for Breach
Specify the consequences of breaching the non-solicitation agreement. This could include injunctive relief, monetary damages, or any other remedies that are available under the law.
Governing Law and Jurisdiction
Specify the state law governing the non-solicitation agreement and the jurisdiction where any disputes arising from the agreement will be resolved.
Once you have drafted the non-solicitation agreement letter, it is important to have it reviewed by a lawyer to ensure that it is legally enforceable and does not violate any state or federal laws.
Important Considerations
When creating a non-solicitation agreement letter, there are a few important considerations to keep in mind:
State Laws
Non-solicitation agreements are regulated by state law, and the enforceability of such agreements can vary from state to state. Some states, such as California, have strict laws governing non-solicitation agreements and may not enforce them. It is important to consult with a lawyer to ensure that your non-solicitation agreement complies with the laws of your state.
Reasonableness
For a non-solicitation agreement to be enforceable, it must be reasonable in scope and duration. A court may not enforce an overly broad agreement restricting an employee’s ability to earn a living after leaving the company. It is important to balance protecting the employer’s business interests and allowing the employee to pursue other opportunities.
Consideration
For a non-solicitation agreement to be binding, the employee must receive some form of consideration in exchange for agreeing to the terms of the agreement. This could include a signing bonus, a promotion, or continued employment.
Conclusion
A non-solicitation agreement letter is important for protecting an employer’s business interests. When drafting such an agreement, it is important to be clear and specific about the terms and conditions and to ensure that it complies with state law and is reasonable in scope and duration. Consulting with a lawyer can help ensure that your non-solicitation agreement is legally enforceable and protects your business.
FAQs
What is an example of a non-solicitation agreement?
An example of a non-solicitation agreement is a legal contract between an employer and an employee that prohibits the employee from soliciting the employer’s clients or customers for a certain period after leaving the company.
How do you write a non-solicitation clause?
To write a non-solicitation clause, you should be clear and specific about the terms and conditions. This should include the duration of the agreement, the scope of the agreement, consequences of breach, and confidentiality provisions.
What is a letter of non-solicitation?
A letter of non-solicitation is a written document that notifies an individual or organization that they are prohibited from soliciting the clients or customers of another individual or organization. It typically includes the terms and conditions of the non-solicitation agreement, such as its duration and the prohibition’s scope.
What is a non-solicit agreement?
A non-solicit agreement is a legal contract between an employer and an employee that prohibits the employee from soliciting the employer’s clients or customers for a certain period after leaving the company. It is designed to protect the employer’s business interests by preventing former employees from using their knowledge and relationships gained to lure away clients or customers.
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