Understanding Non-Solicitation Agreements In Calgary, Alberta
People often misunderstand non-solicitation agreements. They are different than non-competition agreements. A non-competition agreement keeps someone from competing with your business. A non-solicitation agreement keeps someone from soliciting your clients or employees. The non-solicitation agreement lawyers at Kahane Law Office in Calgary, Alberta have the experience to help you protect your business. Watch our video for more information on non-solicitation agreements in Alberta.
What Soliciting Means
Many clients come to us knowing this term but not understanding the concept. In the context of business this concept is simple. Soliciting means that a person approaches a client, employee or supplier and solicits or asks for that person or business to then work with the person asking. Soliciting often takes the form of phone calls, lunches and emails. Generally, it is the action of asking for the business or work and not the mechanism that matters.
What Is A Non-Solicitation Agreement?
A non-solicitation agreements is exactly what it sounds like. Solicitation means asking or requesting. It is an agreement that keeps employees or contract workers of a business from asking or requesting your existing clients to move their business to another company. These contracts also restrict the solicitation of company employees to change to a new employer. Finally, the term also often includes a restriction on a person seeking to hire a supplier of the business. This usually occurs when a specific supplier is a key part of the business operation or business marketing. A non-solicitation clause (instead of a separate agreement) may also be inserted into a contract or employee agreement.
How Enforceable Are These Contracts?
In many cases a non-solicitation agreement is more enforceable than a non-competition agreement. The courts do not support agreements that keep people from earning a living in their regular job. a non-competition agreement prevents that. A non-solicitation agreement lets them earn a living, they just cannot solicit clients or employees from their previous employer. To be enforceable, there needs to be restrictions of time (such as for one year) and the terms cannot be unreasonable.
We often draft the contract looking at ways to minimize the impact of it on the other person to help ensure the enforceable nature. For example, we limit the impact by focusing:
This means limiting a restriction on soliciting people to a specific area. Prohibiting a person from soliciting geographically (ie the person is free to solicit a certain number of kilometers from the business.) allows the person to still work, just outside the area that your business functions. For example, the limit may include a radius or specific cities or towns.
This limits relates to how long the restriction remains in place. Most non-solicitation agreements restrict soliciting only for a specific time frame. Often this time is one or two years. Long terms run the risk of a court stating that it is an unfair restriction on a person’s ability to work.
What A Non-Solicitation Contract Does Not Protect?
A non-solicitation agreement, in Alberta, cannot protect against the former employee or contractor from accepting clients of your company. A non-solicitation agreements only protects against that person from approaching or soliciting business in any way. For example, if a client decided on their own to find the former employee and use their services, that is not a breach of the agreement. When litigated, proving a former employee solicited the business of a customer is a challenge for the business. Most often this prove occurs in the form of the actual client providing the proof as their loyalties lay with the business owner and not the employee.
Situations Where You Need A Non-Solicitation Agreement
Many situations exist where companies require contracts to protect themselves. A key aspect of most businesses is the people who work there. Losing those people causes problems in operations, relationships with clients and creates additional costs. In order to protect your business, the following are examples of situation where you really need a non-solicitation agreement. This contractual obligation often occurs as a term in a contract you have the person sign. Alternatively, the contract also functions as a stand alone agreement. When you need them? For example, these agreements protect companies with:
- All of their employees;
- Any contract worker brought into the business workplace;
- Consultants retained by the business; and lastly
- Situations disclosing client lists to prospective buyers of the business.
Finally, we also note that these contracts function for both incorporated businesses and for sole proprietors (people operating a business without a corporation.)
How To Enforce Your Agreement
If your employee or contractor breaches these agreements, taking action is key. The Courts in Alberta offer several remedies. The first step often includes serving a cease and desist letter to stop the person or business from soliciting contrary to the contract. The next step involves filing a claim to either force them to stop or seeking monetary damages. Remember, in Alberta, while an individual has the ability to self-represent themselves, a corporation needs to hire a lawyer to appear in court.
Getting The Non-Solicitation Agreement Help You Need
We work with you to protect your business. Non-solicitation agreements are complex documents that must be drafted very carefully to protect the future of your business. Professional and experienced guidance is worth the low investment. The non-solicitation agreement lawyers at Kahane Law Office can help with drafting these contracts for you and all your legal needs. CONNECT NOW. We can be reached toll-free at 1-877-225-8817 (or 403-225-8810 locally in Calgary, Alberta), or email us directly here.