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2 ways non-solicitation agreements reduce hiring risks

On Behalf of | Jun 26, 2023 | Employment Law |

One of the reasons that employers have long utilized non-compete agreements in their contracts is that these restrictive covenants provide very broad-reaching protection. Although they are only enforceable when there are specific temporal and geographic limitations integrated, non-compete agreements have long helped companies hire new workers while minimizing the risk that those employees will take important company secrets to competitors or try to start a competing business too soon after leaving an employer’s operation.

Many companies in Florida use non-compete agreements, but such documents have started receiving more scrutiny and are currently the subject of an intense debate at the national level. Companies may turn to alternate restrictive covenants to avoid negotiating an agreement that will ultimately prove unenforceable due to changing federal policy. For example, some companies include a non-solicitation agreement in employment contracts to protect against misconduct from workers in the future.

Protection against client theft

When someone knows who buys from a business, they have access to valuable information. They could then take those client names to a competitor or use them to start their own business later. Non-solicitation agreements often specifically include language that prohibits someone who takes a job at a company from attempting to solicit clients and customers on behalf of a competing business after leaving their job. Preventing employees from intentionally interfering in the client and customer relationships a business has built is often the main goal of a non-solicitation agreement.

Protection against talent poaching

If someone from the sales department takes a job with a competitor, they might then reach out to their former coworkers to try to convince them that they should also change their employment arrangements. Losing one member of a team to a competitor isn’t necessarily going to affect a company’s operations, but losing an entire team or multiple people from different departments in only a few months could do real damage to an organization. Non-solicitation agreements can prevent former workers from trying to headhunt their connections at a company when they accept a new job elsewhere or start a competing company themselves.

Executives and managers at businesses who worry about how members of their team could potentially damage the company’s interests may want to explore non-solicitation agreements and other employment contract inclusions as a means of protecting their business. Integrating the right terms into an employment contract can make all the difference for a company.