Non-solicitation agreements are very useful tools for many employers. A non-solicitation agreement contains language that prevents a departing employee from soliciting business from customers of the employer for a period of time. It may also prevent the departing employee from soliciting employees of the company for a period of time. The non-solicitation provisions may also be coupled with other contractual provisions that prevent a departing employee from using confidential company information – often this comes up in the context of customer lists. The usefulness of the non-solicitation agreement is that it can restrict a departing employees ability to establish a competing business, and restrict his or her ability to divert sales from the employer to a competing business. Thus, for a period of time the agreement provides some protection to the employer from competition by the departing employee.
While non-competition agreements in Oregon have many statutory restrictions that prevent their use in many employee situations, non-solicitation agreements do not have the same statutory restrictions. These agreements are specifically allowed by Oregon statute. For more information on non-competition agreements see my blog post. Typically, many businesses can benefit from an agreement with the employee entered into at the beginning of employment that contains both non-solicitation and confidentiality provisions. Another option is to insert such provisions into a severance agreement when the employee is receiving compensation for entering into the severance agreement. The term of a non-solicitation provision in the employment situation in Oregon typically lasts up to one and a half years after the employment terminates.
Brad Schrock is experienced in drafting non-solicitation and confidentiality agreements, and handles a wide variety of both employment-related agreements and business transactions in general. He handles matters from non-disclosure agreements and commercial leases to complex licensing contracts and contracts for purchase or sale of a business.
The foregoing article is informational only and should not be construed as legal advice.
