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A Better Partnership

Ahead of the Curve Auto Supplier Blog

January 30, 2012

Non-Compete, Non-Solicit and Confidentiality Agreements: What’s the Difference?

A salesperson or key employee joins a competitor and you want to stop it, or at least limit the harm he can do to your business.  Do you have the tools necessary for the job?  You rush to his personnel file and find a signed verification that he received your company handbook requiring him to keep information confidential.  That helps, but it’s not enough.  A confidentiality agreement provides some protection relating to customer lists and other non-public information, but it does not provide safeguards relating to whether an employee may go to work for a competitor or solicit your customers.  In order to retain the ability to assert that a former employee either cannot work for a competitor or at least solicit your customers, you should also have non-compete and non-solicit agreements in place.  A non-compete restricts the employee from working for a competitor for a certain length of time in a certain geographic area.  A non-solicit restricts the former employee from calling on the employer’s customers for a certain period of time.  And, even if you think you have these agreements in place, ask yourself this:  Did we actually get them signed?  Do we know where they are?  Having all three of these areas covered – non-compete, non-solicit and confidentiality – will give you the most flexibility in protecting your business from unfair competition.

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