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Non-solicitation violations can hurt your business

On Behalf of | Feb 1, 2019 | Firm News

You were sorry to see your employee go. Perhaps he or she had been with you for a while and was an asset to your business. As soon as you were able, you began searching for someone to replace your employee. However, before too long, another employee put in notice to quit, and then another.

As you scrambled to vet, hire and train workers to replace the mass exodus, you may have begun to wonder what was happening to make your loyal workers suddenly leave all at once. Then you learned that the first employee who left had started a competing company or was now working for a competitor and was soliciting your staff to come and work for that company. Is this legal? Do you have cause to take action to stop this?

Understanding non-solicitation contracts

If your employee signed a non-solicitation document in his or her employee contract, you may have a valid reason to seek damages through civil court. A non-solicitation agreement, whether it is a separate document or a clause in your regular employment contract, restricts your employees from luring your customers or other employees to leave your business to work at another company. Some details concerning non-solicitation agreements include the following:

  • They can apply to current and former employees.
  • Their restrictions may not last indefinitely but should expire within a reasonable time.
  • Non-solicitation clauses can also forbid former employees from drawing customers or contacts away from your establishment or practice.
  • You may also include a non-solicitation clause in contracts when you purchase an existing business, to prevent the former owner from taking valuable employees or clients with him or her to a new business.
  • Violating a non-solicitation agreement may constitute a breach of contract for which you can pursue damages through the civil courts.

In most cases, the solicitation must be direct, meaning your former employee must contact your current employee and straightforwardly invite him or her to work in the new company. Indirect solicitation, such as sending a mass email advertising the new company or sending a friend to invite your employees to apply for a job, may be more difficult to prove as a violation of the non-solicitation agreement.

When an employee violates your company’s non-solicitation agreement, it could cause great harm to your business. You may lose valuable time and resources training new hires or rebuilding your client base. To understand your options in this situation, you may benefit from speaking with a Nevada attorney who can assist you in taking the appropriate steps to protect your rights and the future of your business.

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