Nonsolicitation on Contract

[vasudel]

What is the name of your state (only U.S. law)? NY

We are one of the vendor & have a contract in place with the client to supply the consultants. We have an employee who is working as consultant with the client, can client reach out to another vendor to hire him so he can still continue as consultant with the same client?.

Thanks.

 

[quincy]

What is the name of your state (only U.S. law)? NY

We are one of the vendor & have a contract in place with the client to supply the consultants. We have an employee who is working as consultant with the client, can client reach out to another vendor to hire him so he can still continue as consultant with the same client?.

Thanks.

Can the client hire a vendor other than you and ask the vendor to hire one of your consultants? Possibly. It depends on the contract you have with the client and the contract you have with your employee/consultant.

Do you have a non-compete provision in your consultant contracts?

 

[vasudel]

Can the client hire a vendor other than you and ask the vendor to hire one of your consultants? Possibly. It depends on the contract you have with the client and the contract you have with your employee/consultant.

Do you have a non-compete provision in your consultant contracts?

Thanks Quincy.

Yes we have Non-Solicitation (for 2 years after termination of contract) and Non-Compete in my employee contracts. Can I file a law suit on both if that happens?. Thanks.

 

[quincy]

Thanks Quincy.

Yes we have Non-Solicitation (for 2 years after termination of contract) and Non-Compete in my employee contracts. Can I file a law suit on both if that happens?. Thanks.

It could potentially be possible to enforce the terms of your contracts by filing for injunctive relief or monetary damages (loss of profits) but with contracts, and maybe especially with the non-solicitation/non-compete clauses in these contracts, specific facts really matter.

New York courts tend not to favor employers in non-compete/non-solicitation disputes, first of all. These provisions, in New York and in many other states, are often looked at as unreasonable restraints of trade. So you can start off at a slight disadvantage if one of your employees breaches one of these contract provisions to find employment with a competitor.

These are several factors looked at when determining the enforceability of a non-compete/non-solicitation clause. These clauses must have "reasonable" conditions, which means the conditions placed on an employee can be no greater than required to protect the employer's legitimate business interests. Legitimate business interests are not limited to but can include trade secrets and confidential information and the loss to a competitor of an employee whose skills, talents, or knowledge are not easily replaced (an employee who is vital to the employer and his business).

In addition, the clauses cannot impose an undue hardship on the employee. The contract terms cannot restrict an employee unreasonably in their duration or geographic scope.

I see, with what you present in your posts, a possible problem in your contracts, with the "2 year" time condition placed on the employee, although it might not be unreasonably long for your particular business. Again, facts matter.

I recommend you review the contracts and the facts with an attorney in your area of New York. After the personal review, your attorney can better determine if your contracts as written are likely to be enforceable in court, should your current client entice your current consultant into leaving your employ and going with a different vendor.

Good luck.

 

[vasudel]

It could potentially be possible to enforce the terms of your contracts by filing for injunctive relief or monetary damages (loss of profits) but with contracts, and maybe especially with the non-solicitation/non-compete clauses in these contracts, specific facts really matter.

New York courts tend not to favor employers in non-compete/non-solicitation disputes, first of all. These provisions, in New York and in many other states, are often looked at as unreasonable restraints of trade. So you can start off at a slight disadvantage if one of your employees breaches one of these contract provisions to find employment with a competitor.

These are several factors looked at when determining the enforceability of a non-compete/non-solicitation clause. These clauses must have "reasonable" conditions, which means the conditions placed on an employee can be no greater than required to protect the employer's legitimate business interests. Legitimate business interests are not limited to but can include trade secrets and confidential information and the loss to a competitor of an employee whose skills, talents, or knowledge are not easily replaced (an employee who is vital to the employer and his business).

In addition, the clauses cannot impose an undue hardship on the employee. The contract terms cannot restrict an employee unreasonably in their duration or geographic scope.

I see, with what you present in your posts, a possible problem in your contracts, with the "2 year" time condition placed on the employee, although it might not be unreasonably long for your particular business. Again, facts matter.

I recommend you review the contracts and the facts with an attorney in your area of New York. After the personal review, your attorney can better determine if your contracts as written are likely to be enforceable in court, should your current client entice your current consultant into leaving your employ and going with a different vendor.

Good luck.

Thanks Quicy, yes we are going to consult attorney.

 

[quincy]

Thanks Quicy, yes we are going to consult attorney.

You're welcome, vasudel.

I think you are smart to see an attorney, to see if your contracts can hold up in court should the client and employee breach the terms.

Good luck.