Plenty of business ideas begin because the people who conceived them were caught up in the moment. The shower turns some people into entrepreneurs, especially the ones who cannot carry a tune. By the time you are clean, dry, and dressed, you might have a fully formed business idea. You might have a product, a brand logo, and an advertising slogan ready to send to the United States Patent and Trademark Office; all you have to do is sit down and type your idea, or else dictate it to SIRI on your phone as you comb your hair.
Extraverts sometimes conceive their business ideas at social gatherings. By the time the waiter brings the check, a group of dudes at a dining table might think that their business plan cannot possibly fail. The problem is that every business needs clients. No matter how much charisma the founders of the business have, and no matter how consistent their product is, no business can succeed without clients. Keeping your customers coming back is easier and relatively low stakes if you are in the business of selling burgers or shower gel. In these cases, you can build brand loyalty just by consistently providing a product that customers love at a price they can afford.
Things are more complicated when your clients are other businesses; you must invest money in building relationships with them over time, and if a business client stops buying your products or services, your company feels the financial impact. Therefore, some businesses make former employees sign agreements promising not to solicit the employer’s clients after the employment relationship ends. The Boulder non-solicitation of clients lawyers at HKM Employment Attorneys LLP can help you decide whether to sign a non-solicitation agreement or make sense of an existing agreement after you have already signed it.
Ways That Your Employer Can Still Control You After Your Job Ends
As unfair as it sounds, employees sometimes still have obligations to their employers after the employment relationship ends. This may seem contrary to the spirit of a market economy, but agreements restricting the activities of former employees are common, especially if the employee worked under an employment contract and in a high-ranking role. There are three main restrictions that employers can place on former employees after the employee stops working for the employer:
- Non-compete – The employee may not engage in any business activities that directly compete with the former employer for a certain duration after the employment relationship ends, usually one or two years. Non-compete clauses usually specify a geographic area, such as within a 50-mile radius of the employer’s place of business, or in Boulder County. The most restrictive non-compete clauses prohibit the former employee from setting up a new business in the employer’s market niche and also from working for one of the former employer’s existing competitors.
- Non-disclosure – The employee may not reveal trade secrets or other confidential, business-related information that he or she learned in the context of working for the employer. This confidential information includes, but is not limited to, the names and contact information of the employer’s clients.
- Non-solicitation – The employee, after ceasing to work for the employer, may not seek to do business with current or recent clients of the employer.
These restrictive provisions are common in employment contracts, and employers sometimes ask employees to sign them when an employee gets a promotion or becomes party to information that the employee could potentially use to compete with the employer. Courts do not always enforce them, though. Employers do not have the right to tell their ex-employees that they can never work again unless they move away from Boulder or change career fields, just as trampoline parks cannot make premises liability laws disappear just by posting signs that say “jump at your own risk.”
“Solicitation” Is Such a Gross Sounding Word
The word “solicitation” has several meanings, many of them unflattering. Its core meaning is to try to sell to customers, but the connotation is that it is the seller is the one who approaches the buyer in hopes of initiating a transaction. At least, that is what it means when stores post signs that say, “No soliciting.” It means that the only legitimate reason to come to the store is to buy the merchandise that the store is selling; while you are there, you do not have the right to try to persuade people to buy Pokémon cards, multilevel marketing nutritional supplements, or anything else from you. Conversely, when someone gets criminal charges for soliciting, it usually means that the person was seeking to be a customer of a practitioner of the world’s oldest profession.
In the context of non-solicitation clauses in employment law, solicitation means that you try to engage in a business relationship with potential clients. Your non-solicitation clause might limit you to not contacting clients who did business with your former employer at the time you stopped working there, or it may be more broadly defined, to include clients who ended their relationship with your former employer within the past several years.
Is Your Non-Solicitation Agreement Too Restrictive?
Non-solicitation agreements are easier to enforce than broadly worded non-compete clauses that prohibit former employees from doing anything that competes with the former employer. The same rule applies, though, that the more specific a non-compete agreement is, the more likely a court is to enforce it if your former employer sues you for attempting to solicit its former clients. It should specify how recently the clients must have done business with the former employer for them to be off limits to you. It should also specify what counts as solicitation; for example, you can probably persuade the court that sending holiday greetings from your personal email address to a client of your former employer does not count as solicitation.
Contact HKM Employment Attorneys, LLP, About Non-Solicitation Agreements
The Boulder employment lawyers at HKM Employment Attorneys, LLP, can counsel you about non-solicitation agreements. Contact the employment lawyers at HKM Employment Attorneys LLP in Boulder, Colorado, to set up a consultation.
