A non-solicitation clause is a common provision that employers incorporate into their employment agreements. The clause essentially tries to protect a company’s clients. Under Washington law, non-solicitation provisions are generally enforceable provided that they meet certain conditions.
What is a Non-Solicitation Provision?
A non-solicitation clause is often used in an employment contract between an employer and an employee. By the terms of the provision, the employee essentially agrees:
- not to solicit the employer’s clients or customers,
- for the benefit of the employee or for the benefit of a competitor of the employer, and
- not to solicit after leaving the company.
Sometimes the clause may also include language that prevents employees from soliciting another employee to leave the company when they quite or move on to other employment.
Note that employers can present a non-solicitation agreement to an employee at any stage of the employment relationship. However, employers usually use them in their initial paperwork when brining on a new hire. But companies also sometimes included the provisions in severance packages.
Are Non-Solicitation Agreements Enforceable?
Some commentators argue that an issue with these provisions is that they tend to conflict with a person’s unofficial “right to work.” The idea here is that since everyone should have the right to work in a certain profession, non-solicitation agreements seem like they impede on a person’s ability to secure work and succeed at a job. In fact, the Supreme Court of California has stated that the provisions are largely unenforceable except to protect trade secrets.
But Washington has not taken this direction. Courts will typically enforce a clause if the following are true:
- The clause does not prevent an employee from leaving the employer,
- If the clause prevents an employee from soliciting clients, the company’s client list must have some value and contain confidential information,
- The employer must have a specific business reason for having the non-solicitation agreement (for example, a company may use the clause to help protect trade secrets), and
- The clause cannot operate so as to shut an employee out of a job.
Do I need the provision in my employment contracts?
At the end of the day, we find that many of our clients are in need of a non-solicitation clause, regardless of size or industry. From scaling tech companies to small local businesses, our clients are often looking to protect their client lists and prevent their employees from being poached — the exact situations a well-crafted non-solicitation clause is designed to protect. They are protecting their businesses; not trying to keep folks from earning a living even if in the same industry. To see where you might fall in the spectrum of options or what is best for your business and the culture you are creating, contact us for a consult.
More questions? Not sure if your contracts need a non-solicitation clause?
Foundry Law Group Is Here to Help!
The attorneys at Foundry Law Group have years of experience in helping businesses manage and protect themselves from contractual risks and concerns. Our team follows the latest developments affecting our clients’ operations, and we apply that knowledge as we build proactive strategies for long-term protection. We are always here to help so make sure to contact our talented team now!