Businesses have good reason to use non-solicitation agreements. Imagine the time and effort a North Carolina company invests in cultivating relationships with clients. Then one day an employee decides to leave the company and hire those clients away, depriving the company of valuable business it once relied on. Non-solicitation agreements can help prevent this scenario from happening. But some business owners feel non-solicitation clauses are an insult to employees. This is not and should not be the case.
As Chron.com points out, a non-solicitation agreement is not the same as a non-compete clause. It is true that employees can feel alarmed if they feel an employer is trying to strictly limit their future work prospects. However, a non-solicitation agreement does not ask an employee to never compete with a current employer at a future time. An employee is just being bound not to use company information, such as a client list, to unfairly take away business from the current employer.
The typical provisions of a non-solicitation agreement are something many employees can respect. A person who has aspirations to run a company someday can likely empathize with an employer’s efforts to protect their operation. It may even inspire employees to take similar actions to protect their own sensitive information in the event they start their own companies at a later date.
Even so, some employees do not like the idea of being restricted in their future business endeavors and may decide to leave a company rather than sign such an agreement. However, packaging a non-solicitation agreement with an incentive plan can make the agreement more palatable. Some companies offer a cash bonus to be earned over time and a deferred bonus that an employee receives after helping the company achieve a performance benchmark. This can motivate an employee to stick around the company for a while.
Non-solicitation agreements are worth pursuing because they can be effective, plus courts look favorably on them since they do not excessively limit the work prospects of an employee. Since businesses may draft non-solicitation agreements in different ways, this article should not be read as legal advice, only for your personal educational benefit.
