Employers, particularly those with a large number of employees and in many locations, might want or need to incorporate a restriction aimed at limiting individuals covered under the non-solicitation agreement. By doing this, a court would be prevented from deeming such a restriction to be overly broad or too restrictive. Remember, unlike non-disclosure agreements, many courts in multiple jurisdictions are more likely to consider non-solicitation agreements valid since the non-solicitation agreements do not hinder a former employee’s competing ability.
As a continuation of this discussion, we have hammered in this short blog post and Part III of our series, another key consideration that every employer must factor in when drafting valid employee non-solicitation agreements that would be enforceable under the law.
Considering Limiting the Restraint on Employee Solicitation to a Reasonable Time Period
For the purposes of compliance with local, state, and federal guidelines regarding non-solicitation agreements, employers should take proactive steps to review and understand all applicable laws within their jurisdictions. This is because some jurisdictions have been known to consider non-solicitation agreements on par with non-competition covenants. When such is the case in one’s jurisdiction, an employer should, as a best practice, consider limiting the duration and period a non-solicitation agreement should remain active.
In our blog post “Restrictive Covenants Made Easy,” we mentioned that, as one of the key ingredients, a restrictive covenant, such as a non-solicitation agreement, should be reasonable in time. Regarding this ingredient, we mentioned that it is illogical to have a restriction without a time limit. Generally, any restrictive covenant made to last up to one year is presumably reasonable. However, we also asserted that the further out the restriction goes, from 1 year and beyond, the more it becomes unreasonable. Accordingly, it goes without saying that an employee non-solicitation agreement with an unlimited time frame may be deemed unreasonable.
Ideally, a non-solicitation agreement stating, “the restrictions of this paragraph last for a period of twelve months following the termination of the Employee’s employment with Company” may be deemed reasonable in a court of law. However, it is important for employers and employees to understand that the limit on the time of an employee’s non-solicitation agreement should depend on a valid business justification, including the time needed to recruit additional qualified individuals or the training time required for new employees.
In Part IV of this series, we will move the discussion forward by hammering on “Avoiding Ambiguous or Overreaching Employee Non-solicitation Agreements” as another critical consideration that every employer must factor in when drafting valid employee non-solicitation agreements that would be enforceable under the law.
In the meantime, stay tuned for more legal guidance, training, and education. In the interim, if there are any questions or comments, please let us know at the Contact Us page!
Always rising above the bar,
Isaac T.,
Legal Writer & Author.