Non-Solicit’s are replacing Non-Compete’s – Here are 12 Pointers

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“The secret of Happiness is Freedom, and the secret of Freedom, Courage.”
– Thucydides

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Actual Client Experiences:
2024 has seen a significant change in how employers seek to protect their valuable relations with their (i) clients, (ii) employees, and (iii) critical vendors and providers, when employees move from their organization to another employer. Simply put, “Non-Compete’s are ‘out’ and Non-Solicits are ‘in.’” The trend has been noticeable for a few years now. This year, however, it has evolved into something of a seismic shift.

Lessons Learned:
What’s going on, and why? Over time, more than ever Courts, state legislatures, licensing authorities, Members of Congress and even the Federal Trade Commission have come to view Non-Compete restrictions to be anti-competitive, unduly harmful and anathema to employees’ freedom to take their efforts, skills and expertise to new employers in hopes of a more rewarding work experience, and plainly inconsistent with “free enterprise.”

As employers have lost faith in the enforceability of Non-Competes, many have turned to Non-Solicitation provisions as the next best alternative for protecting their valuable relations. And, so, we now see them in employment contracts and offer letters, and other workplace documents, too.

Non-Compete’s have been used for many years to prohibit employees from moving from their present employer to another one that is “competitive” with it. Non-Solicit’s are different: they do not prohibit former employees from working for competitors, but prohibit them from “taking with them” valuable client relations, precious employee skills, and prized, if not critical, relations with vendors and suppliers. It’s the same concern now addressed with a different tool, and applied with a whole lot of “creativity.”

And, so, we are now seeing Non-Solicit’s grow in (a) their presence in workplace documents, (b) the number and variety of employees subject to them, (b) the complexity (some would say “convolutedness”) of their language, and (d) Court Complaints alleging misappropriation by former employees. Thus, the risks they pose to employees’ careers are surely on the rise.

What You Can Do:
Here are 12 Pointers to help guide you in your likely future “Non-Solicit Challenges”:

Pointer 1: Don’t fear to Inquire, Up Front, If a “Future Restriction” (that is, Non-Solicit or Non-Compete) is a Requirement of the Job: Simply put, there is nothing wrong, and everything right, with your inquiring during discussions of a job offer, about your future mobility. “Will I be required to agree to sign a future restriction agreement (“You know, a, non-solicit or non-compete) now or later, if I choose to accept this offer?” or words to that effect. Don’t presume the answer will be “Yes” or “No.” Just listen carefully.

If the answer is “No,” you might then request that a simple statement to that effect be placed into the Offer Letter or Employment Contract. If the answer is “yes,” well, read on . . .

Pointer 2: Non-Solicit Restrictions are often “hidden” or “buried” within other work-related documents, both during hiring and later on, too: Non-Solicit clauses are often found in the oddest of places, including (a) employee handbooks, (b) company policy manuals, (c) confidentiality agreements, (d) bonus and equity award agreements, even (e) Promotion Acceptance Letters, in addition to Offer Letters and Employment Agreements.

We recently reviewed a 6-page Offer Letter and found it “incorporated by reference” a Non-Solicit clause on Page 92 of a 105-page Employee Handbook, rather casually mentioned in the Offer Letter’s “Exhibit A.”

Pointer 3: Don’t fear asking for Modification, that is, to Negotiate. Only one thing is certain: if you don’t ask for better terms in an agreement, or problematic provisions to be deleted from an agreement, you won’t get them. If you find a Non-Solicit clause in the “papers” you need to sign to accept a job offer, stock award, annual bonus, commissions, or anything else, don’t fear to negotiate its terms. Instead, fear not to.

Pointer 4: Reduction of Risk, No Matter How Slight, is a Reward in Itself. Any reduction in risk, even seemingly slight reduction of risk to you, is valuable. Like quitting smoking, or beginning a regular exercise regimen, it’s a healthy habit to regularly try to limit any and all career risks, and degrees of career risk, in any way you can. Just as a few examples, if there does exist a Non-Solicit clause in your Offer Letter or Contract, or other documents, you might consider how it might affect your moving on to a better job, and request the insertion of a statement that the Non-Solicit clause:

(a) will not apply to you if you are laid off or otherwise terminated without “Cause,” defined narrowly as misconduct or grossly poor performance,

(b) will be inapplicable to your post-employment solicitation of any company client with whom you had a working relation prior to coming to the company, and/or

(c) you will not be considered to have violated your non-solicitation obligations if you engage in any solicitation of a company client who you were then unaware was a company client or prospective client.

There are many, many other examples that may apply to your unique facts and circumstances. The point is this: any reduction in career risk is a valuable thing for you.

We offer for a modest fee a “Model Letter: Response to Request You Sign a Non-Solicitation Agreement.” It contains 16 of the most important modifications to request, and shows you “What to Say, and How to Say It.™ To obtain your copy, just [click here.] Delivered by Email – Instantly!

Pointer 5: At a Minimum, Try to Protect Your Own “B.O.B.” “B.O.B.” stands for “Book Of Business.” For those primarily engaged in sales, marketing, business development or brand partnerships, this is especially relevant.

If you are being interviewed for a new job, and have in the past developed what we used to call a “Rocket Rolodex” of clients, especially clients with whom you have worked with closely and developed a strong rapport, consider using the rationale that “I came here with them, so I’d like to give them the choice of leaving with me, if ever I were to leave.” Your “B.O.B.” is surely one of your most valuable career assets; do what you can to protect it. Again, “No Ask – No Get.”

Pointer 6: Be on the Alert for the Word “Indirectly.” The “devil” in Non-Solicit language is the word “indirectly” as found in the phrase “directly or indirectly solicit.”

Your calling to offer a job to a former colleague who remains employed by your former employer is almost surely a “direct” solicitation. What if she calls you “out of the blue?” Probably not. What if she is directed to you by a recruiter? That’s getting into the “gray zone.” Remember: watch out for the word “indirectly.” If your new employer uses an in-house recruiter who casually asks your opinion of a colleague who remains working for your former employer, is that you soliciting her “indirectly?”

It may not be feasible to ask that “indirectly” be removed wherever it is found, but it may behoove you to ask that “indirectly” be defined in your agreement in a balanced manner, using commonplace words and phrases, thus easily understood.

For a modest fee we offer a “Model Letter: Seven Brief Letters To Former Clients during Your Non-Solicitation Period to Maintain the Relation, Not the Business.” It shows you “What to Say, and How to Say It.™ To obtain your copy, just [click here.] Delivered by Email – Instantly!

Pointer 7: Suggest insertion of the words “applicable only if I act knowingly and intentionally” into the text of any Non-Solicit clause: As an example, if you send out a mass emailing to industry participants, and one lands on the computer screen of a client of your former employer, is that a solicitation? Did you really “knowingly and intentionally” send it to him or her? You’ve got a very strong argument that it did not violate a Non-Solicitation clause, especially if you wisely asked for – and received – the insertion of “only if knowingly and intentionally” into the text of your Non-Solicitation obligation.

The same goes for television, billboard, digital, and other widely disseminated methods of communication. In almost all circumstances, they would be deemed no more than “unknowing and unintentional solicitation,” if at all.

Pointer 8: Expect Your Next Employer to Seek from You a Promise You’ve Not Signed a Non-Solicit. Along with the rise in “Non-Solicits” in Offer Letters and Employment Contracts, more employers than ever – wary of lawsuits and the like – are increasingly requiring that new employees represent in their Offer Letters or Contracts that “I have never signed any document that might interfere with the fulfillment of my duties and responsibilities in my new position.”

This is the text of a rather commonly requested contractual representation:

    “Employee hereby represents and warrants that she or he, as the case may be, has never signed any agreement or other binding document by the terms of which he or she, as the case may be, might be rendered or deemed unable to, or restricted from, fulfillment of any of the duties and responsibilities requested or required by the Company.”

Pointer 9: Shorten the post-employment duration for which your Non-Solicit is effective. Most commonly, we see Non-Solicits written to last for 12 months post-employment. There is no reason you should not respectfully request that the applicable post-employment period be limited to a less restrictive, more reasonable 6 months, instead, or even three.

The rationale is that this gives your employer ample opportunity to “insert” another person into “your shoes” and thus, solidify that existing business relation. And, too, your next employer may feel more comfortable with your being restricted for a shorter period of time, during which you would use extreme care in choosing new clients.

Pointer 10: Request that any Alleged Non-Solicit Violation be Conditioned on Your Receipt of a Written Notice describing In Detail what is Perceived You’ve Done Wrong. Scare tactics are, by their intent and nature, scary. It is quite common for an Employer, who sees its customers, clients, consultants and/or employees “walking out the door” to a former employee’s new employer, to allege it is due to a Non-Solicit violation, even without any evidence or proof of that. Having such a “descriptive notice” clause written into your agreement can only serve to avoid or prevent baseless threats and lawsuits.

For a reasonable fee, we offer a “Model Letter: Response to a ‘Cease and Desist’ Letter Alleging a Violation of Non-Solicitation Violation.” It shows you “What to Say, and How to Say It.™ To obtain your copy, just [click here.] Delivered by Email – Instantly!

Pointer 11: If Sales or Business Development is Your Primary Function: Especially if your primary role is sales, marketing or business development, and you’ve been terminated without “Cause,” you might request that language be inserted into a Separation Agreement calling for your employer to either (a) continue to pay salary and benefits until you become re-employed, or (b) release you from your Non-Solicit clause.

Pointer 12: Sometimes it is best to “Just Say No.” There are times and circumstances in which if you’ve tried everything in new-employment discussions to insert reasonability into the terms and provisions of new employment agreements, especially those that limit your freedom, and your prospective employer insists on what seems a Non-Solicit provision that will almost surely diminish your ability to put to your advantage your developing career, it may just be best to say, in effect, “Thanks, but No Thanks.” In our clients’ experience, that is often what works.

It’s extremely unlikely that any employee will need to remember all 12 of these Non-Solicit Pointers, but the (i) “right” Pointer in the (ii) “right” Non-Solicitation clause of the (iii) “right” Employee in the (iv) “right” circumstances can make a heck of a difference in her or his career trajectory and success.

In Summary . . .

A great deal of effort devoted to “making a living” – however you may do so – needs to be focused upon navigating and negotiating issues of risk and reward. For employees, the focus is usually, first, on the increase of “rewards” and secondarily, to protection of their freedom to work for whomever they wish.

From the employer perspective, more than we’ve seen before, focus and determination are devoted to limiting their risks of loss of their (i) trade secrets, (ii) clients, (iii) employees, and (iv) consultants, too, four of their most important business assets.

Non-Solicit clauses are central to the efforts to both “sides,” and the “field” upon which the tug-of-war is played. As Non-Competes have diminished in their use and enforceability, employers’ risk-prevention efforts are more evident in the proliferation of Non-Solicits.

Employees are urged to heighten their awareness of precisely what they are signing, remain open to opportunities to modify them in their favor, and summon the courage to do so.

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