To be competitive, businesses allot time, energy and resources to train their employees and build strong customer connections. When a skilled employee leaves or a valuable client no longer supports the business, the company may suffer unnecessary losses in value and reputation. Unfortunately, these scenarios can occur when a former employee solicits current employees or clients. This is why some companies choose to include a nonsolicitation clause in their agreements to prevent this from happening.
Before putting this clause in your agreement, you should understand the basics of nonsolicitation agreements in Texas.
What is it and when can I use it?
A nonsolicitation clause prevents former employees from soliciting current employees or clients from their former company for a period and within a specific area. This simply means that former employees cannot ask other employees to leave with them or request the former employer’s clients to procure products or services from their new company.
A business can include this clause when entering into an agreement with a new or departing employee.
What are its enforceability requirements?
For enforceability purposes, Texas considers nonsolicitation as noncompetes. As such, the agreement’s terms should be reasonable in duration, geographic area and scope of activity. The company must create the agreement only to protect business interests and not impose other unreasonable restrictions.
Agreements like nonsolicitation and noncompete shield companies from unfair practices in the business environment. Of course, it still depends on each business. A nonsolicitation agreement may be for a company if its needs and priorities align with the purpose of the clause. If there is doubt, it may be helpful for a business to consult with a legal professional.
