Non-solicitation: Why it pays to read your contract before making a move
As a creative, experienced, highly knowledgeable expert in your field, it’s natural to feel the world is your oyster. Why...
As a creative, experienced, highly knowledgeable expert in your field, it’s natural to feel the world is your oyster. Why shouldn’t you be able to do what you like? Nobody owns you, your insights or the people you’ve worked with.
Well… this sounds good in theory. However, in reality, when an employer has hired you to perform duties and deliver results for clients as part of their team – and perhaps provided training – then your work and the relationships around it are seen as not entirely your own. After all, would you have had the same resources, the same experience or been introduced to those clients if you hadn’t been working for that firm?
This is the main point behind an item in your employment contract you may not have noticed before: the non-solicitation clause. And, if you are looking to make a move – either to another full-time role or into the freelance world – it’s a clause you need to take seriously.
Would you try to steal a client from a previous employer?
Non-solicitation can take on different meanings according to the industry you work in. In the realms of IT and software development, the term can encompass three specific scenarios: taking clients from your previous employer, working for a competitor or tempting colleagues to join you in a new workplace.
If you have just left, or are planning to leave, your place of employment, then directly approaching their clients can land you in hot water. Yes, these may be people whose business you know inside-out and you have grown to like on a personal level, but in the end they have been in your world precisely because you worked for your previous employer.
It’s worth also considering that your relationship with them is only one of many and that their first loyalty may still be towards your ex-boss, who may have taken them on at an early stage in their business and has helped their livelihood grow.
As a rule, even if you suspect clients are looking to move, it’s best to take the high ground, do the right thing and not contact them directly. Especially if you had a clause in your contract preventing you from doing so for a specific time period, with the threat of legal action if this happens.
Working for competitors
It’s now common for employers to stipulate a non-compete clause to prevent employees immediately going to work for a direct competitor. While they can’t restrict your work entirely, they can state that you cannot do so without an interim break (or so-called ‘gardening leave’).
This is to prevent the direct transfer of commercially sensitive knowledge or material – or the advantages of your expertise and talents – the implication being such assets will have lost impact over a period of time. It also allows your ex-employer to further develop and evolve on the work you’ve done so that your inside knowledge will no longer be crucial, or for them to launch it publicly during your off-time so the expertise is then in the public domain. Either way, while you still retain all your core skills and talents, your recent knowledge and work will have lost its competitive edge.
Tempting ex-colleagues to join you
Similarly to courting your previous employer’s clients, a non-solicitation clause can also prevent you from inviting former colleagues at your last place of work to join you in your new role. This has been known to happen in the past, where one person leaving to join another firm led to whole teams departing, only to reappear at the competitor’s office. When you have created a great dynamic with a group of people you’ve grown to call friends as well as colleagues, it feels right to keep the old gang together so you can continue to create the same magic results.
But this will again compromise your former employer’s business – and in quite a dramatic way. Not only will they potentially lose an entire department, its skills and the services it delivered, they will also lose the ideas, the reputation that accompanied that team and finally the enormous amount of time and energy necessary to re-hire personnel. This could be a huge blow to the business, from which it may never recover.
How long does a non-solicitation clause run for?
The duration of a non-solicitation clause will again vary from contract to contact, but there are some generally accepted terms. While there is no legal limit to the length of time these clauses cover, if an employer specificies an extended (and possibly unfair) time period, then this can be open to a legal challenge.
The customary duration for a non-solicitation clause is six months from the termination of the employment. If you hold a senior position, with privileged access to commercial information and business relationships, then you may be asked to take up to a year out. The key point here is that the period should be reasonable and justifiable on the part of the employer.
How does a non-solicitation clause affect me?
Aside from the comments above, we can’t give a general comment on every scenario, and the restrictions under a non-solicitation clause may vary from employer to employer.
The best advice we can give is to thoroughly read your current employment contract to see (a) if there is such a clause in place, and (b) what specific actions, materials and time periods it covers.
Only then will you get absolute clarity on your position and know what you may or may not do, and for what specific period of time. Then you’ll be able to make an informed decision going forward.
Can you protect me from a non-solicitation clause?
Negotiations around job appointments only get to the fine print nitty-gritty at a later stage, but at every point we will be looking out for your best interests. If you have deeply-felt opinions around non-solicitation clauses, then we will certainly do what we can to temper these terms in your contract, but in the end the employer’s preferences will also need to be considered.
The world of employment is a two-way street, and employers also need to protect their commercial interests, investments and relationships. If they have clear policies around these points that they are unwilling to compromise, then it will fall upon you to be flexible (or not). If the new role is exactly what you were looking for, with welcome perks and favourable terms for pay, benefits and time off, then a non-solicitation clause may not feel so significant.
One thing to remember:
The non-solicitation clause in your contract covers your own actions, but not those of others. It is entirely up to your ex-colleagues and your previous employer’s clients who they chose to talk to or do business with, now or in the future. As long as you do not actively engage them or tempt them away from your last employer or cause them to move on, you will likely have no case to answer.
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