Non-Solicitation Clauses: Watch your step!

Non-Solicitation clauses are a staple in employment agreements. A standard non-solicitation clause limits an employee's solicitation of a Company’s staff and customers during that person’s employment and for a certain time period after their employment ends. Employers want to have some measures of protection in place for staff and customers critical to their business operations. In simple terms, they do not want employees who are leaving to have broad uncontrolled access to their book of business and staff. Non-solicitation clauses are not industry specific- they run across the gamut of industries: advertising, marketing, financial services, insurance, tech, and much more.

How would you violate such a clause? If your employment agreement states that you cannot directly or indirectly induce away or solicit any customers during your employment or for one year after, here’s an example of what you cannot do: leave the agency, set up your own shop or join another and begin sending introductory letters to your former employer’s customers to offer the services you were performing there. This could be considered a violation of the non-solicitation clause and land you in hot water. Courts have awarded money damages in these instances. Michigan courts will uphold fair, well-drafted clauses that do not unfairly restrict competition and are designed to protect customer relationships.

Are you contemplating taking a position and need your employment agreement reviewed? Have you been asked to sign a severance agreement and need to understand what you can and cannot do under its terms? Are you an employer that needs your employment agreements reviewed to determine if your non-solicitation clause will pass muster? Contact Great Lakes Legal Group today!


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