Non-Solicitation and Non-Competition Agreements

Restrictions on the use and disclosure of trade secrets and other confidential information are basic elements of any trade secret protection program and companies need to understand when and how to include such restriction into non-solicitation and non-competition agreements they ask their managers and employees to sign in order to restrict their ability to solicit business from the customers for the benefit of their future employers or to otherwise actively or passively engage in activities that compete with the company’s business.  Non-solicitation agreements are appropriate for employees, such as sales representatives, whose job activities involve extensive interaction with the customers of the employer. A non-competition agreement may be useful for senior management and other key employees who may logically be inclined to compete with the employer following termination of his or her employment, either directly or as an employee of another company.  Care must be taken, however, not to run afoul of applicable state laws that dictate the scope of enforceability of specific attempts to limit competitive activities.  Westlaw Next subscribers can learn more about, and obtain examples of, non-solicitation and non-competition agreements, by reviewing the chapter on Employee Noncompetition and Nonsolicitation Agreements in Business Transactions Solution (§§ 168:1 et seq.).

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