Non-Solicitation Agreements In Washington State
Employee non-solicitation clauses are often included within non-compete agreements in Washington, though they may also be found in other agreements or as a stand-alone agreement. Non-solicitation clauses are typically meant to accomplish two primary things:
Prevent a former employee from poaching a company’s customers.
Prevent a former employee from recruiting a company’s employees.
Consider an example. If you left a Seattle software company to start your own software company, you’d probably be tempted to solicit business from customers of the big software company, especially those customers you’d developed a relationship with. You might also want to convince a few of your former co-workers to come help you start the new company.
But if you’d signed a non-solicitation agreement at your former company, then you wouldn’t be able to do either of these things, at least not for a period of time after you left your job. That is, assuming that the non-solicitation clause is enforceable.
So let’s take a look at whether non-solicitation clauses are enforceable.
Are Non-Solicitation Clauses Enforceable In Washington?
In Washington, non-solicitation clauses will be enforced so long as they’re reasonable and lawful. This is the same standard that’s applied to non-compete agreements and, in fact, Washington courts analyze non-solicitation restrictions in the same way they analyze non-compete restrictions.
Whether a non-solicitation clause is reasonable usually turns on two key factors:
The geographic scope of the restriction
The length of time of the restriction
The broader in scope and length of time a non-solicitation clause is, the less likely it is to be found reasonably necessary to protect the employer’s legitimate business interests. So, for instance, a worldwide ban for 20 years would be much less likely to be upheld by a Washington court than a ban limited to the Seattle area for 1 year.
But the issue of reasonableness comes down to the facts of each particular case and so both employers and employees would be wise to consult with an employment attorney before taking action on non-solicitation clauses.
Non-Solicitation of Customers
Clauses prohibiting solicitation of customers are particularly prevalent for employees who are sure to have lots of customer interaction and/or access to client lists. Examples of this includes salespeople and upper management, both of which regularly have direct contact with and responsibility for customers.
Were a former employee to attempt to trade on personal relationships developed with customers of the former employer, it could do great damage to the business of the former employer.
That’s why non-solicitation clauses often prevent former employees from soliciting business from customers or even prospective customers, particularly those who the former employee worked with directly or about whom the former employee learned trade secrets or other confidential information.
Non-Solicitation of Employees
Every business invests a certain amount of time and resources into their employees. Some invest a great deal. Understandably, then, business want to protect their investment. Hence, the use of non-solicitation of employees clauses.
Aspiring entrepreneurs should be particularly aware of these clauses. If you want to start your own company doing something similar to your current employer, there’s a decent chance you’d like to recruit some of your current co-workers to leave and start the company with you.
But if you’re subject to a non-solicitation clause, you’ll almost certainly be unable to do this. So you should think hard before deciding to work for a company that will require you to sign a non-solicitation agreement, as it may interfere with your plans to start your own venture.
How Are Non-Solicitation Clauses Enforced?
An employer may bring a lawsuit against the former employee and can seek an injunction to halt the targeted activity, as well as monetary damages for harm suffered due to the violation of a non-solicitation clause.
Keep in mind that the employer will be required to prove that the non-solicitation agreement is both reasonable and lawful for it to be enforced. If you are an employer or an employee with doubts about the enforceability of a non-solicitation clause, you should consult with an employment attorney.
As with non-compete agreements, the uncertainty of whether non-solicitation clauses will be enforced in a particular case provides reason for both employers and employees to seek legal help.
For Washington employers, it’s often best to work with an attorney in crafting a non-solicitation clause that’s narrowly tailored to protect your business’ legitimate competitive needs. You’re unlikely to find this in a generic sample clause you find for free on the internet.
For Washington employees, particularly would-be-startup founders, you need to understand how a non-solicitation clause could inhibit your ability to establish an initial customer base and team of employees.