Changing dynamics in national and global job markets now make it less likely that employees will remain with the same company for more than a few years. Sometimes, employees leave to pursue a better opportunity with another company in the same field; and sometimes, they leave to start their own business. In either case, it begs the question: Is it okay to ask clients or customers to “follow” them to their new company? In Florida, the answer is: it depends. Specifically, it depends on whether the employee is subject to a non-solicitation agreement – and the extent of any such agreement.
What Is a Non-Solicitation Agreement?
In the context of Florida business law, solicitation is a term used to describe activity in which someone who has left one company encourages clients or customers to do business with another one. The other company in question is usually one that the employee has joined or started.
A non-solicitation agreement prevents employees from accessing and using valuable information – namely client/customer lists – for their own benefit after leaving the company.
Are Non-Solicitation Agreements enforceable?
To be enforceable, a non-solicitation agreement must comply with the requirements set forth in Section 542.335 of the Florida Statutes. This means that it must:
• Be created to protect legitimate business interests – A non-solicitation agreement should be implemented to protect meaningful relationships with customers, patients, or clients; or goodwill associated with any such customers, patients, or clients. If a Florida court determines that your business created a non-solicitation agreement for any other reason, it has the discretion not to enforce it.
• Not be too limiting – Any such agreement cannot be so restrictive that it interferes with an employee’s ability to make a living. Accordingly, it must be implemented for a specified time and geographic region. In most cases, these agreements should be implemented for a maximum of two years.
• Be explicit – As with other relevant contracts and/or agreements, it should be straight forward and easy to understand. The use of confusing or convoluted language may prompt a court to decline to enforce the agreement.
In other words, a non-solicitation agreement must be “reasonable” to be enforced. Since this is a subjective term, we’ve included some relevant case law.
For example, in Austin v. Mid State Fire Equip., 727 So. 2d 1097, 1098 (Fla. 5th DCA 1999) the court determined that a non-solicitation provision met this criterion since it only restricted a former employee from soliciting any of the former employer’s customers and disclosing confidential business information.
In another case, Milner v. Tassy, 377 F. Supp. 2d 1209 (S.D. Fla. 2005) the court also ruled that a non-solicitation clause was reasonable. In this case, the court reached its decision because the agreement was implemented for a specified period (two years) and only barred solicitation of the former employer’s customers, including prospective customers that the former employees dealt with or obtained confidential information from.
If you need help drafting a non-solicitation agreement, want to know whether it’s the right option for your Florida business, or are involved in a dispute involving a non-solicitation agreement, contact your trusted legal team today.
We can help you with the legal issue that you’re facing, feel free to email us any legal queries and we will answer it for free. Our email address: firstname.lastname@example.org and website: thelawq.com