Non-Soliciation Vs. Non-Compete

[xander2022]

I am hoping to leave my current company, to the company that bought part of it. They have a no solicitation agreement. If I apply to said company without being solicited, I am able to leave of my own free will without any issues. Is that correct? Or could there still be part of the agreement that my current employer would need to "release" me or come to an agreement with them?

 

[Zigner]

What US state?
Not that it matters, as there is no way we can intelligently comment on an agreement that we have not seen.

 

[xander2022]

Idaho. In general, is that the way the difference would work between the two types of agreements? Or is there no way to know?

 

[quincy]

Idaho. In general, is that the way the difference would work between the two types of agreements? Or is there no way to know?

Often non-compete, non-disclosure and no solicitation clauses are included together in an employment contract, especially when a company has trade secrets to protect.

Solicitation generally has an element of enticement or encouragement to it. An employer wants to protect their valuable employees from being lured away by another competing business.

Non-disclosure agreements are used to protect confidential information or trade secrets from being disclosed to others.

Non-compete agreements are promises made by employees to their employers that they will not start their own competing company, or work for another competing company, for a specified period of time, in a specified geographic area, once the employment ends.

The purpose of all three agreements is to protect an employer’s legitimate business interests (valuable business information). A new and competing employer will want to know about any of the employment agreements previously signed by a prospective employee at his former place of employment before hiring.

The agreements need to be personally reviewed by an attorney in your area to see if, one, the agreements are enforceable as written and two, to advise you of the legal risks you face if you violate them.

 

[adjusterjack]

I am hoping to leave my current company, to the company that bought part of it. They have a no solicitation agreement. If I apply to said company without being solicited, I am able to leave of my own free will without any issues. Is that correct? Or could there still be part of the agreement that my current employer would need to "release" me or come to an agreement with them?

The only way to get a definitive answer to your question is ask your employer.

 

[cbg]

I agree with everything that has been said above; there can be no intelligent answer without seeing the agreement in question.

However, the non-solicitation agreements I am most familiar with do not limit you from going to another company if you've been solicited, but limit you from being able to lure your current co-workers to the other company once you are there.

Whereas non-compete limits your ability to go to a competing company, and non-disclosure relates only to intellectual property and proprietary information.

 

[quincy]

The only way to get a definitive answer to your question is ask your employer.

Going to the employer would not provide xander2022 with a definitive answer because the employer is not likely to point out (or even see) the legal flaws in the agreements. It could also lead to his current employer waving goodbye to xander2022 before he is ready to leave.

 

[adjusterjack]

Yeah, that's always a risk.

It just occurred to me that, since this was a sale of one part of the employer to another company, that there may have been some sort of agreement as to potential transfer of employees from one to the other.

 

[quincy]

It is probably the new company that would be most at risk of violating a no-solicitation clause by offering employees of the original company an employment package that entices employees away from their original place of work.

Not only would the company agreements between employee and original employer need to be reviewed but also what needs to be known are the terms of any agreement made between the original company and the new company about employee transfers.

 

[PayrollHRGuy]

TITLE 44
LABOR
CHAPTER 27
AGREEMENTS AND COVENANTS PROTECTING LEGITIMATE BUSINESS INTERESTS
44-2701. AGREEMENTS AND COVENANTS PROTECTING LEGITIMATE BUSINESS INTERESTS. A key employee or key independent contractor may enter into a written agreement or covenant that protects the employer’s legitimate business interests and prohibits the key employee or key independent contractor from engaging in employment or a line of business that is in direct competition with the employer’s business after termination of employment, and the same shall be enforceable, if the agreement or covenant is reasonable as to its duration, geographical area, type of employment or line of business, and does not impose a greater restraint than is reasonably necessary to protect the employer’s legitimate business interests.
History:
[44-2701, added 2008, ch. 295, sec. 1, p. 824.]

 

[quincy]

TITLE 44
LABOR
CHAPTER 27
AGREEMENTS AND COVENANTS PROTECTING LEGITIMATE BUSINESS INTERESTS
44-2701. AGREEMENTS AND COVENANTS PROTECTING LEGITIMATE BUSINESS INTERESTS. A key employee or key independent contractor may enter into a written agreement or covenant that protects the employer’s legitimate business interests and prohibits the key employee or key independent contractor from engaging in employment or a line of business that is in direct competition with the employer’s business after termination of employment, and the same shall be enforceable, if the agreement or covenant is reasonable as to its duration, geographical area, type of employment or line of business, and does not impose a greater restraint than is reasonably necessary to protect the employer’s legitimate business interests.
History:
[44-2701, added 2008, ch. 295, sec. 1, p. 824.]

Some of what are considered “legitimate business interests” in Idaho are the company’s customer and vendor relationships, the company’s goodwill (i.e., reputation), the company’s confidential information and the company’s trade secrets.

Before an employer can take action against an (former) employee who has violated a condition in a non-compete, non-disclosure or no solicitation agreement, the employer must demonstrate or establish that there is a likelihood of irreparable harm to the company with the employee violation.

Non-compete agreements are already banned in a few states and in D.C., and the ban (or additional limits placed on these agreements) may extend nationwide as a result of President Biden’s July 9, 2021, Executive Order (See Section 5(g) in the text of the Order linked below):

https://www.whitehouse.gov/briefing-room/presidential-actions/2021/07/09/executive-order-on-promoting-competition-in-the-american-economy/

 

[zddoodah]

I am hoping to leave my current company, to the company that bought part of it.

So...you currently work for Company X. Company Y is a part owner of Company X, and you want to work for Company Y. Correct?

They have a no solicitation agreement.

So...Company X and Company Y are parties to an agreement that you're describing as "a no solicitation agreement." Correct? If so, what does that agreement say? Have you actually seen the agreement?

If I apply to said company without being solicited, I am able to leave of my own free will without any issues. Is that correct?

Whatever agreement exists between Company X and Company Y has no relevance whatsoever to your ability to leave your employment with Company X. Of course, the agreement -- depending on what it says -- may be relevant to Company Y's ability to hire you.

 

[quincy]

So...you currently work for Company X. Company Y is a part owner of Company X, and you want to work for Company Y. Correct?



So...Company X and Company Y are parties to an agreement that you're describing as "a no solicitation agreement." Correct? If so, what does that agreement say? Have you actually seen the agreement?



Whatever agreement exists between Company X and Company Y has no relevance whatsoever to your ability to leave your employment with Company X. Of course, the agreement -- depending on what it says -- may be relevant to Company Y's ability to hire you.

I believe that Company X and Company Y are two separate companies. In other words, Company Y is not “part owner of Company X” but rather Company X sold off part of its business and Company Y purchased it.

A no-solicitation agreement would be relevant to xander2022 if he starts his own competing business or if he is hired by Company Y and xander2022 encourages/entices his Company X coworkers/associates to join him at Company Y.