We can help you put together a good NSA - non-solicitation agreement that will protect your business for years to come. Contact us today for help.
Non-Solicitation Agreements Lawyer – Chicago, IL
Protecting Your Client List
When an employee leaves your business you are already looking at taking a loss due to the amount of money you will need to spend to locate, hire, and train a replacement. Sometimes departing employees make matters worse by attempting to steal your clients; this is especially true if the departing employee assisted with obtaining the client and feels that he or she has a right to “keep” the client.
This is simply untrue: a client that an employee lands is the property of the business for which the employee works, not the property of the employee himself (or herself). However, employees who have worked with a given client for a significant amount of time may not see things that way; as such, it is a good idea to have new and existing employees sign a non-solicitation agreement (“NSA” for short).
NSAs protect you
An NSA is similar to a non-compete agreement, in that the employee agrees to be restricted from engaging in certain activities even after he or she has left your company. However, where the latter prohibits employees from engaging in an activity that is deemed to be in competition with your business, the latter simply states that a departing employee may not contact clients of your business and attempt to get them to switch companies. An NSA does not prohibit a departing employee from engaging in the same type of business as your company does; rather, it simply prohibits him or her from contacting your clients and attempting to get them to switch companies.
A business spends a tremendous amount of time and money obtaining and developing clients. To do all of this, only to lose the client when an employee leaves the business, can be financially ruinous. To protect your business, you need to have a well-drafted NSA which will act as a shield to your business in the event that an employee leaves.
Elements of a good NSA
A good NSA should be reasonable in its breadth. Similar to an NCA, an NSA needs to function to effectively protect your business without running the risk of being considered overbroad by a court. The elements to consider here are reasonableness in scope, duration, and geographic reach.
Further, you should avoid the temptation of simply slapping together a boilerplate NSA from sources located on the Internet. An NSA really does need to be tailored to fit the position that it covers, and your business will likely have different NSAs to cover different classes of employees. Attempting to take a “one size fits all” approach to drafting your NSAs is a good way to get them thrown out by a judge.
Another thing to keep in mind is differences in jurisdictions. A NSA in state A, for example, may be interpreted differently than one in state B. This can be particularly troublesome for businesses located near adjacent states, particularly if the applicable laws in the adjacent states is different than the ones in your state.
To simplify this, and to protect your business, the NSA should include a choice of forum clause that specifically recites that the parties agree it shall be construed according to the laws of a specific state. This will save you from unpleasant surprises in the future.
An effective NSA will also address what happens if the employee who signed it changes jobs within the business. If you hire someone for position A and she signs an NSA, in some states the NSA will no longer be valid if the employee is promoted to position B within your business. To address this, it is a good idea to have employees sign a new NSA each time they change jobs. It may even be a good idea to periodically—perhaps once a year—have employees sign new NSAs. This will serve the role of reminding them that they have signed an NSA as well as protecting your business in the event that a given employee’s role with the company has changed drastically since the last time he or she signed an NSA.
Finally, a good NSA will do more than simply state that solicitation of clients is prohibited. Smart employees—and competing businesses—can often find ways around this, and rather than spending the time and money litigating the matter it’s best if you address it at the front by having an NSA that spells out what behaviors are and are not acceptable in the event that an employee leaves the business.
We are well-versed in the complexities of NSAs. We have practiced in corporate law for many years and we know the ways that the law will impact the interpretation and application of an NSA. We can help you put together a good NSA that will protect your business for years to come. Contact us today and let us help you protect your business.
Turn to an experienced Illinois non-solicitation lawyer for help.
Gentleman Law has been helping clients with business law and non-solicitation agreements for more than 16 years. Call (312) 741-1039 or contact Gentleman Law online today to discuss your case, free of charge. The office is centrally located in the Loop near Daley Plaza just steps from the Cook County Courthouse and the federal courthouse. Spanish is spoken in the office for your convenience.