Protecting your Business Part II: Non-Solicitation Agreements

We have previously blogged aboutnon-competition agreements. Non-solicitation agreements are also commonly utilized by employers to prevent employees from damaging their businesses.

Non-solicitation agreements generally take the form of a provision that prevents a former employee from soliciting his or her former co-workers or employees to leave the company and work with the leaving employee at a competing venture. Although certain provisions titled non-solicitation provisions prevent a former employee from soliciting clients to engage a competitor to provide goods or services similar to those provided by the former employer, those provisions are actually non-competition agreements styled as non-solicitation provisions. This blog post will focus on provisions designed to prevent an employee from soliciting his or her fellow employees to move with that employee at a competitor.

The Virginia Supreme Court has identified the relevant criteria to be considered when determining whether a non-solicitation provision is enforceable. Like non-competition agreements, non-solicitation agreements constitute restraints on competition, requiring courts to balance “‘the provisions of the contract with the circumstances of the businesses and employees involved.’” Assurance Data, Inc. v. Malyevac, 286 Va. 137, 144 (2013) (quoting Omniplex World Servs. Corp. v. US Investigations Servs., Inc., 270 Va. 246, 249 (2005)). When attempting to enforce a non-solicitation agreement, an employer “bears the ‘burden to show that the restraint is no greater than necessary to protect a legitimate business interest, is not unduly harsh or oppressive in curtailing an employee’s ability to earn a livelihood and is reasonable in light of sound public policy.’” Assurance Data, 286 Va. at 144 (quoting Modern Env’ts, Inc. v. Stinnet, 263 Va. 491, 493 (2002)). In evaluating whether the employer has met its burden and shown reasonableness, courts consider the “‘function, geographic scope, and duration elements of the restriction.’” Assurance Data, 286 Va. at 144 (quoting Home Paramount Pest Control Cos. V. Shaffer, 282 Va. 412, 415 (2011)).

Numerous decisions by Virginia courts have provided additional guidance as to the reasonableness of a non-solicitation provision. However, each non-solicitation provision will be assessed based on the facts and circumstances surrounding it. As a result, if you need to commence a lawsuit against a former employee who has solicited other employees from your company, or if you are in litigation because your former employer has alleged that you have breached a non-solicitation provision, it is important assess your case using the guideposts provided by courts and the specific facts of your case. Keithley Law has experience drafting non-solicitation agreements, prosecuting breaches of non-solicitation agreements, and defending employees accused of breaching non-solicitation agreements.

If you need legal advice on non-solicitation agreements or any business law issues, Contact Keithley Law, PLLC today by calling (703) 454-5147and schedule an initial consultation in our Fairfax law office with one of our Virginia attorneys.

Categories: