Emma Maxwell 2017-02-10 15:00:00
In recent years, many businesses have include non-solicitation clauses in their employment contracts. A non-solicitation clause is when it prevents an employee from competing with a former employer upon their departure.
As any job applicant can attest to, it has become rather ubiquitous in the labour market.
Over the last couple of years, as employees attempt to fight these clauses, many courts have given their verdicts on the side of the worker. This means that it is becoming increasingly difficult for companies to effectively implement non-solicitation clauses and have them enforced once it is discovered the ex-employee has violated the part of the employment contract.
This has companies asking the question: how can the human resources and legal departments add non-solicitation clauses to the employment contract and ensure they are abided by the system?
Here are five tips for drafting the best non-solicitation clauses:
Although some legal experts will suggest not to fret over the terminology, other legal professionals will say it is imperative to concentrate on the terminology, wording and statements. By penning the right verbiage, you can ensure that the clause is ironclad and can't be broken. Writing the best clause will result in the avoidance of vaguery and the inclusion of precision. Learn about the terminology about non-solicitation agreements at Law Insider.
In addition to the terminology, you must have a clear date and location included in your non-solicitation clause.
First, when it comes to the date, you should state that the clause is in effect from January 1, 2017 until January 1, 2022. It would also be prudent as to the why to avoid any misunderstanding and misinterpretation either by the employee or by the courts.
Second, when it comes to the location, you must state that the clause pertains to the area 100 kilometres away from the location of the business. Again, it would be wise to add the why.
Even if the employee had signed on the dotted line a couple of years ago, it doesn't necessarily mean that the non-solicitation clause was a reasonable one. If you had a clause that stated they would be bound to the contract for 10 years in Canada and couldn't compete then the court would determine this to be unreasonable.
Ultimately, you have to be reasonable in order for the non-solicitation clause to hold up in court.
You could be working day and night with your human resources and legal teams, but you should always realize that the non-solicitation clause is difficult to produce. The reason for this is because more and more the courts are ruling in favour of the employee rather than the employer. Learn more about non-solicitation clauses at the Whitten and Lublin LLP website.
In other words, be ready to lose this clause if it is ever taken to court to be held under scrutiny.
Aside from being reasonable, your non-solicitation clause should also show that it has a legitimate interest. The clause must spotlight the fact that it is being used for the protection of the business rather than simply a nice-to-have feature for the employment contract. If the company must absolutely have this restriction or restraint then there is a better chance of winning the case.
Legitimacy, reasonable and terminology are all elements you have to hone in on as you develop and maintain a non-solicitation clause.
Indeed, this has been a point of contention for so many years by so many legal commentators, professionals and experts. It is a much discussed subject in both the classroom and the courtroom, but the courts regularly showcase their apprehensiveness to actually enforce the clause, even if it protects the company's interests.