Non-compete and non-solicitation agreements

difference between a non-compete agreement and a non-solicitation agreement

Non-Compete and Non-Solicitation Agreements

We previously wrote about non-compete agreements in Mississippi here. This post will address the distinctions between a non-compete agreement and a non-solicitation agreement.

Non-compete agreements.

As the name suggests, these contracts are often used by employers to prevent an employee leaving and going into competition against the employer.

As our prior post discusses, such agreements are generally disfavored in Mississippi. The courts will, however, uphold the contract if (i) it is reasonable in scope and duration and (ii) the employer can prove an economic need for enforcing the agreement.

A non-compete agreement can take several forms. For example, it may prohibit all forms of competition by the former employee. It can also be more limited, restricting it to competition in certain categories of the employer’s business or in certain geographic areas.

Non-solicitation agreements.

These agreements generally take two forms. The first prohibits a former employee from soliciting customers of the employer.

Sometimes the contract only prohibits the former employee from soliciting customers of the employer but will otherwise allow the former employee to go into the marketplace and compete for new customers. But, sometimes it prevents the employee from competing for new customers as well.

A second, common form of a non-solicitation agreement is one that prohibits the former employee from soliciting other employees to come work with her. With this type of agreement, the employer is seeking to protect its employee-base.

Quite often, an agreement will contain both a non-compete agreement and non-solicitation agreement.

Before signing either of these agreements, look carefully at the language. Try to picture what would happen to you if you left the job. Could you get gainful employment elsewhere without violating your contract?

If you have a question about non-competes agreements or non-solicitation agreements, contact the Panter Law Firm at 601-607-3156.

Panter Law Firm, PLLC, 7736 Old Canton Road, Suite B, Madison, MS 39110.

601-607-3156.

www.craigpanterlaw.com

Craig Painter