Most employees contribute a lot to your business, sharing their expertise, energy, and unique abilities. If they leave for other opportunities, you wish them well and thank them for their loyalty. Unfortunately, some departing employees may try to recruit your remaining workers or even your clients. These situations can be addressed in advance with restrictive covenant agreements drafted by a dedicated attorney.
Whether restrictive covenants are included in employment agreements or as standalone contracts, they are an essential tool for safeguarding your employees and clients. At Sparks Law, a Connecticut non-solicitation agreements lawyer can help draft these valuable contracts, covenants, or clauses.
There are four types of restrictive covenants recognized by common law and some state statutes:
Non-solicitation agreements in Connecticut are generally viewed in terms of case law. States are tasked with considering the positions of both the employer and employee when deciding what is fair when restricting employees when they leave an employer. An experienced Connecticut attorney could draft or review non-solicitation agreements presented to employees to ensure that they will hold up in court.
The case Branson Ultrasonics Corp. v. Stratman (D. Conn. 1996) dealt with the enforceability of restrictive covenants and determined that the terms must be reasonable to be enforceable. Important factors included the length of time and the geographic area of the restriction, fairness to both parties, and if there was interference with the public interest. Connecticut already had a history of applying the same criteria to non-solicitation agreements as it had in non-compete agreements and continued to do so after the Branson decision.
In Robert S. Weiss & Assocs., Inc. v. Wiederlight (Conn. 1988), the court upheld a non-solicitation clause that barred the former employee from pirating an employer’s clients after leaving that job. However, the court in Webster Insurance Inc. v. Levine (Conn. Super. Ct, 2007) refused to enforce a non-solicitation clause barring a former employee from accepting business from an employer’s clients after leaving that job. The reasoning was that the Webster restrictions were against public policy because the terms limited who clients could do business with, which constituted a restraint of trade issue. A knowledgeable local attorney could further explain these legal criteria for non-solicitation agreements.
Along with reasonableness, a restrictive covenant must include consideration. Consideration is an exchange of something valuable or the forbearance of an action to get something else of value. Generally, an employee will receive a new job by signing a non-solicitation agreement.
Thus, explaining a non-solicitation covenant to a new employee and offering them the job contingent on accepting the agreement covers these two provisions of a restrictive covenant. A skilled attorney can draft non-solicitation terms that comply with Connecticut law.
As time passes, you expect to grow your business, lose some employees, and gain others who are more qualified for your changing needs. You should also prepare for when some departing employees try to undermine you by soliciting clients or other employees.
One way to stop this is through enforceable restrictive covenants. These agreements should be reasonable and be signed knowingly by your employees. If you would like to discuss this important business tool, a Connecticut non-solicitation agreements lawyer is standing by. Call Sparks Law today to discuss.
