20 Feb Understanding No Hire/Non-Solicitation Agreements
A company has two key assets – its employees and its customers.
What are the benefits of these types of agreements?
To better understand what a no-hire or non-solicitation agreement is, consider this scenario: If you hire a star creative director who not only begins working with your best clients, but also brings new clients to your business on the basis of his or her creative skills, you as an agency owner will want to protect your interests if that creative director decides to leave, and a non-solicitation agreement is one way to attempt to do that. A type of business contract, a non-solicitation agreement is a way to keep the clients who have become part of our business roster from moving on to a rival company if your creative director decides to leave.
A non-solicitation agreement will also prevent an employee from attempting to poach long-time clients or staff, which is what happened in the movie Jerry Maguire when Tom Cruise’s character encouraged his co-worker, played by Renee Zellweger, to leave with him when he rashly decided to start his own business. If either had signed a non-solicitation agreement, the action could have led to a breach of contract lawsuit against them and their new business.
Are you considering a no-hire or non-solicitation agreement?
Because these agreements are difficult to enforce in California, it’s important to have an experienced attorney to help you craft a document that protects your company. For more information, contact Fernald & Zaffos in Los Angeles at 323-410-0300 or Las Vegas at 702-410-7500.