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  • Non-solicit agreements.

    Contract Questions Employment Questions in California Posted 2 years, 6 months ago

    I signed an agreement upon joining a startup which includes the following clause: Non-Solicitation of Employees/Consultants. During my employment with the Company and for a period of one (1) year thereafter, I will not directly or indirectly solicit away employees or consultants of the Company for my own benefit or for the benefit of any other person or entity. as such, are there circumstances/situations in which i can leave with a colleague to start our own non-competing company without violating this agreement? any advice would be appreciated, thanks

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  • Profile Picture of Christine Hansen
  • Christine Hansen
    Attorney at Hansen Legal
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    If you feel you can do so safely, your best option may be to simply ask the owners of the company if they will interpret the contract as prohibiting you from setting up this other company. If they believe that your choice is NOT a violation of the clause in the contract, then you will be free to do what you like without concern. (Be sure to get their commitment in writing that they do not see this as a violation of the contract).

    If you are not ready to take the risk of confronting them or you are sure they will see it as a violation and take you to court, you are then forced to determine if it is worth the risk to proceed. In court, there are two ways you could defend your actions - first you argue that you did not violate the agreement, and second, that the clause is unenforceable as against public policy. Your argument that you did not violate the agreement lies in the idea that at the time of signing, you assumed that you were simply signing a non-competition clause, not signing away your rights to enter into an independent, non-competitive venture with another person just because they happen to be a co-worker.

    The second argument, that the clause is unenforceable as against public policy, has often been successful against these types of broad clauses because they unreasonably interfere with your legitimate right to make a living after you have left the company.

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  • Profile Picture of Frank Natoli
  • Frank Natoli
    Founding Partner & CEO at Natoli-Lapin, LLC
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    Unlike non-competition clauses these provisions are much more likely to be upheld. I agree with my colleague below that a good place to start is by getting written premission so to speak, but this may not be possible for a variety of reasons to wit you simply don't want them to know what youre doing.

    You can consider whether they are likely to seek enforcement through the courts keeping in mind that it is expensive to do so. I do not agree that arguing as against public policy is a winning argument. This frankly depends on the court you are in. Some are more likely than others to uphold these provisions. You could argue that peers deciding to start their own thing is NOT a solicitation and that the language was trying to prevent one from soliciting other employees to be employees of one NOT partners (if that makes any sense).

    If you would like to discuss further over a free phone consult, feel free to contact me anytime that is convenient.

    Kind regards,

    DISCLAIMER: this is not intended to be specific legal advice and should not be relied upon as such. No attorney-client relationship is formed on the basis of this posting.

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