non-solicitation

Of course. Here is a strong, enforceable non-solicitation clause tailored for a part-time technology sales rep in New Jersey, written to maximize defensibility while using plain language.

Key Considerations for New Jersey:

• Reasonableness is Key: New Jersey courts carefully scrutinize non-solicitation clauses. They will only enforce them if they are reasonable in three ways:
  1. Duration: The time period must not be longer than necessary to protect the employer's legitimate interests.
  2. Geographic Scope: The area must be limited to where the employee worked and the employer has customers. For a sales role, a geographic restriction is often less relevant than a customer-based one.
  3. Scope of Activity: The restriction must be narrow and specific to the actual business the employer is in.
• Customer Non-Solicit: This is the most critical and enforceable part for a sales role. It protects the company's customer relationships.
• Employee Non-Solicit: This protects the company's workforce from being raided. It is generally enforceable if reasonable.
• "Part-Time" Status: The clause must be reasonable for a part-time employee, implying a narrower scope or potentially a shorter duration than for a senior, full-time executive.

Why This Clause is Strong and Defensible:

• Plain Language: It uses clear terms like "client," "solicit," and "encourage" instead of overly complex legalese.
• Reasonableness:
  • Duration (12 months): One year is a standard, commonly upheld duration for sales roles in New Jersey. It is seen as sufficient time for the company's client relationships to be transferred to a new rep and for your influence to fade.
  • Scope (Tailored Definition of "Client"): This is the most important feature. It does not restrict you from selling to any company. It only restricts you from soliciting clients you actually worked with or learned confidential information about in your last year. This is highly defensible because it directly protects the company's legitimate interests without being overly broad.
  • No Overly Broad Geography: For a sales role, a geographic restriction is often struck down. This clause wisely avoids a geographic limitation (e.g., "within 50 miles"), focusing instead on the specific, protectable client relationships.
• Specificity for a Sales Rep: It explicitly covers "accepting business" and "providing competitive products or services," which are the exact actions a sales rep would take.
• Savings Clause (Reformation): The clause that allows a court to modify (or "blue-pencil") the agreement if it's too broad increases the likelihood that some part of the restriction will be enforced, rather than the entire clause being thrown out.
• Legitimate Business Interests: It explicitly states the interests it protects (client relationships, trade secrets, workforce), which helps justify its reasonableness to a court.

Final Recommendation: This clause provides a strong, enforceable level of protection for your consulting firm. For a part-time sales rep, this is an excellent balance between protecting your business and creating a legally sound agreement.

Non Solicitation

A non-solicitation clause is most commonly and appropriately included in an employment agreement, but it can also be found in client service agreements. The purpose and enforceability of the clause will differ depending on which document it's in.

1. In an Employment Agreement

This is the primary place you'll see a non-solicitation clause. Its purpose here is to prevent a former employee from "poaching" your clients and/or your employees after they leave the company.

• Non-Solicitation of Clients/Customers: This is designed to protect your customer relationships. It prohibits a former employee from actively reaching out to, contacting, or soliciting your clients for a new business, typically for a set period of time after their employment ends. This is particularly important for businesses where customer relationships are a key asset, such as sales, consulting, or professional services.
• Non-Solicitation of Employees: Often called an "anti-raiding" or "no-poach" clause, this provision prevents a former employee from recruiting their former colleagues to join them at a new company. This is crucial for protecting your workforce and preventing a mass exodus of talent.

Enforceability in New Jersey: New Jersey courts generally find non-solicitation agreements to be more reasonable and thus more enforceable than non-compete agreements. However, they must still meet the same "reasonableness" test:

• They must protect a legitimate business interest (e.g., your client relationships or investment in your employees).
• They must be reasonable in scope, duration, and geographic area. For instance, a clause that prevents a former employee from soliciting clients they never worked with would likely be seen as overbroad. A one-to-two-year term is often considered reasonable.
• They must not impose an undue hardship on the employee or be injurious to the public.

2. In a Client Service Agreement

A non-solicitation clause in a client service agreement serves a different but related purpose. It's typically used to prevent the client from poaching the service provider's employees.

For example, if you are an IT consulting firm providing services to a client, you would put a clause in your service agreement that says the client cannot solicit or hire your IT staff who are working on their project for a certain period of time. This protects your business from training an employee who is then hired away by your client.

Key Distinction:

• Employment Agreement: Clause is between you (employer) and your employee. It protects you from the employee's future actions.
• Client Service Agreement: Clause is between you (service provider) and your client. It protects you from the client's future actions related to your employees.

In summary, a non-solicitation clause is a very common and critical component of an employment agreement, especially for employees who have client-facing roles or access to confidential information. It is designed to protect your business interests in a way that is often more legally defensible in New Jersey than a broad non-compete clause. It can also be used in client service agreements for the separate purpose of protecting your workforce from being poached by clients.

No Interference or Solicitation

• Employee agrees that during his employment, and for a period of two (2) years following the termination of his employment (for whatever reason), that neither he nor any individual, partner(s), limited partnership, corporation or other entity or business with which he is in any way affiliated, including, without limitation, any partner, limited partner, director, officer, shareholder, employee, or agent of any such entity or business, will: (i) request, induce or attempt to influence, directly or indirectly, any employee of the Company to terminate their employment with the Company; or (ii) employ any person who as of the date of this Agreement was, or after such date is or was, an employee of the Company. Employee further agrees that during the period beginning with the commencement of Employee’s engagement with the Company and ending two (2) years after the termination of Employee’s employment with the Company (for whatever reason), he shall not, directly or indirectly, as an employee, agent, consultant, stockholder, director, partner or in any other individual or representative capacity of the Company or of any other person, entity or business, solicit or encourage any present or future customer, supplier, contractor, partner or investor of the Company to terminate or otherwise alter his, his or its relationship with the Company. This provision shall survive the termination of this Agreement for any reason.

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Non solicitation

During this Agreement as well as for a period of one year after the termination date of this Agreement, [ ___ ] shall refrain from, either directly or indirectly:

i. engaging individuals who are on the payroll of BUILD then MARKET or any enterprise affiliated with BUILD then MARKET or who were so during Beukema’s service for BUILD then MARKET ;

ii. soliciting or entering into commercial relationships with any person or entity which is a client of BUILD then MARKET or any enterprise affiliated with BUILD then MARKET at the date on which this Agreement terminates, or was a client during the three year period prior to that date even if such contact is initiated by these customers or relations.

protect the company's business interests

When a sales representative joins a company with non-compete and non-solicitation agreements, and confidential IP includes sales lists/customer lists, the scope of what's "off-limits" typically extends beyond just active and past clients. It often includes prospects and cold leads as well, though the enforceability can depend on the specifics of the agreement and state laws.

Here's a breakdown of why:

• Confidential IP and Sales/Customer Lists: These agreements are designed to protect the company's "legitimate business interests." A sales list, customer list, or even a list of prospects and cold leads that the company has invested time and resources in developing can be considered confidential information or a trade secret. If an employee could simply take that list and leverage it at a new company, it would undermine the former employer's efforts and competitive advantage.

• Non-Solicitation Agreements: These agreements aim to prevent a departing employee from poaching clients, customers, or even potential clients (prospects) from the former company. The key is often whether the employee gained access to or developed these relationships through their employment with the former company.

  • Active and Past Clients: These are almost always explicitly covered. The company has a direct, established relationship with them.

  • Prospects/Cold Leads: The inclusion of prospects and cold leads in a non-solicitation agreement is common, especially if the company has invested in identifying, qualifying, and cultivating these leads. If the sales rep gained knowledge of these prospects or had any level of interaction with them through the company's efforts (even if they didn't become a "client" yet), they could be considered off-limits. The argument is that the company expended resources to identify these potential customers, and allowing a former employee to immediately solicit them would be unfair.

• Non-Compete Agreements: While non-solicitation focuses on who you can't contact, non-compete agreements restrict where you can work or what type of business you can engage in. If a non-compete is in place, it might broadly prevent the sales rep from working for a competitor in a similar role where they could naturally leverage any leads (active, past, or prospective) they gained knowledge of at the old company.

Key Factors for Enforceability:

The enforceability of these clauses, especially concerning prospects and cold leads, often hinges on:

1. Reasonableness: The restrictions must be reasonable in terms of duration (how long it lasts), geographic scope (where it applies), and the scope of activities restricted. Overly broad agreements are less likely to be enforced by courts.

2. Legitimate Business Interest: The company must demonstrate a legitimate business interest that the agreement protects, such as trade secrets, confidential information (like sales lists), or customer relationships.

3. Specific Language: The wording of the agreement is crucial. If it explicitly defines "clients" or "customers" to include prospects, it strengthens the company's position.

4. State Laws: Laws regarding non-compete and non-solicitation agreements vary significantly by state. Some states are more employer-friendly, while others are more employee-friendly (e.g., California generally disfavors non-competes). The Federal Trade Commission (FTC) has also recently issued a rule to ban non-compete clauses nationwide, though its enforcement is currently paused due to a court order and subject to appeal. It's important to note that the FTC rule's impact on non-solicitation agreements is still being clarified, but it may apply if they are so broad that they function as a non-compete.

In summary:

While active and past clients are almost certainly off-limits under a non-solicitation agreement, it's highly probable that prospects and cold leads that the company considers its confidential intellectual property (i.e., part of its developed sales lists or customer lists) would also be included. The rationale is to protect the company's investment in identifying and developing those potential business opportunities.

It is always advisable for the sales representative to seek legal counsel to review the specific terms of their non-compete and non-solicitation agreements and understand their obligations and limitations in their particular jurisdiction.

The question of geographic enforceability for non-compete agreements, especially in the context of remote work and global clients, is indeed complex. Courts generally try to balance an employer's legitimate business interests with an employee's right to earn a living.

Here's a breakdown of how geographic enforceability works, particularly for a New Jersey business with clients in the Tri-State area:

1. The "Reasonableness" Standard is Key:

Regardless of remote work or global clients, the core principle is reasonableness. Courts will only enforce non-compete agreements if they are:

• Necessary to protect a legitimate business interest: This includes trade secrets, confidential information (like customer lists), and goodwill/customer relationships. It's not about stifling competition but protecting what the company has invested in.

• Reasonable in scope, duration, and geographic area:

  • Scope of activity: What specific activities is the employee restricted from doing?
  • Duration: How long does the restriction last? (Typically 6 months to 2 years, but shorter durations are generally more enforceable).
  • Geographic area: This is where it gets tricky with remote work.

• Not imposing undue hardship on the employee: The agreement shouldn't prevent the employee from finding work in their field entirely.

• Not injurious to the public: Does the agreement stifle innovation or reduce consumer choice?

2. Geographic Enforceability in Remote Work / Global Clients:

• Challenge to Traditional Geographic Boundaries: The traditional model of defining a geographic scope as a radius around an office or a specific city/county becomes less relevant when work is remote.
• Focus on Market Reach and Employee's Actual Impact: Instead of the employee's physical location, courts increasingly look at:
  • The employer's actual market reach: Where does the company genuinely do business and compete? If a New Jersey company serves clients in the Tri-State area, a non-compete restricting work only in New Jersey might be too narrow if the employee regularly interacted with clients in New York and Pennsylvania. Conversely, a restriction covering the entire globe for a regional business would likely be deemed unreasonable.
  • The employee's specific role and client relationships: Did the employee primarily serve clients in a particular region? Did their work directly impact sales or client relationships in specific geographic areas, regardless of where they physically sat?
  • Where the employee's "competitive activities" would occur: If a software developer in New Jersey works on projects for global clients, the "geographic" impact of their work might be where those clients are located, or where their former employer actively competes for those types of clients, rather than just their home address.
• "Blue Penciling" / Judicial Modification: If a court finds a geographic scope (or any other part of the agreement) to be too broad, it might "blue pencil" (or modify) the agreement to make it more reasonable, rather than striking it down entirely. However, some states are less inclined to do this.

3. New Jersey Law and the Tri-State Area:

• New Jersey's Stance: New Jersey courts generally enforce non-compete agreements if they are reasonable and protect a legitimate business interest. They conduct a "fact-intensive inquiry" into each case.
• Current Legislative Landscape: It's critical to note that New Jersey, like many states, has been considering legislation (Senate Bill No. 4385 and No. 4386) that would significantly restrict or even ban non-compete agreements, especially for non-senior executives. While these bills haven't fully passed as of my last update, they signal a trend toward greater employee protection. If passed, they would likely limit non-compete periods to 12 months, and importantly, the geographic reach would be "limited to the areas in which the worker provided services during the two years before the employment relationship ended and does not prohibit the worker from seeking employment in other states." This specifically addresses the remote work issue.
• Tri-State Area Considerations (New Jersey, New York, Pennsylvania):
  • Choice of Law Clauses: Most employment contracts have a "choice of law" clause, stating which state's laws will govern the agreement (e.g., "This agreement shall be governed by the laws of New Jersey"). While often respected, courts can sometimes ignore these if the chosen law has no reasonable relationship to the parties or the transaction, or if applying it would violate a strong public policy of the state where the employee lives and works.
  • New York: New York generally enforces non-competes that are reasonable and protect legitimate business interests. They typically don't require additional consideration (like extra pay) if the agreement is signed at the start of employment.
  • Pennsylvania: Pennsylvania also enforces non-competes, but they are more employee-friendly than New York. They require "adequate consideration" (something of value in exchange for signing the non-compete) which often means it must be signed at or before the start of employment, or if later, additional benefits must be provided. There are also new laws limiting non-competes for healthcare professionals in PA.

Practical Implications for a New Jersey Business with Tri-State Clients:

• Tailored Agreements: Avoid "one-size-fits-all" non-competes. The agreement should be specifically tailored to the employee's role, the confidential information they access, and the actual geographic reach of their client interactions.
• Define Geographic Scope by Client Base/Market: Instead of a fixed radius, consider defining the geographic restriction based on:
  • Specific client accounts or territories the employee managed in the Tri-State area.
  • The specific market segments or industries in which the company actively competes in the Tri-State area.
  • A prohibition against soliciting any clients of the former employer with whom the employee had material contact, regardless of their location. This is often a more effective approach than broad geographic bans.
• Focus on Non-Solicitation and Confidentiality: Given the challenges of broad geographic non-competes in remote work, robust non-solicitation (of clients and employees) and confidentiality/trade secret provisions often provide better protection. These clauses prevent the misuse of valuable company information and relationships without completely barring an employee from working.
• Stay Updated on Legislation: The legal landscape for non-competes is rapidly evolving. Employers in New Jersey (and any state) should regularly review and update their agreements to comply with new laws and court decisions, especially with the ongoing discussion around federal and state-level bans/restrictions.
• Consult Legal Counsel: Given the complexities and state-by-state variations, it is crucial for businesses to consult with an attorney specializing in employment law to draft and enforce non-compete agreements that are likely to be upheld in court.

In essence, while a New Jersey business can enforce non-competes for remote employees serving Tri-State clients, the geographic scope will be scrutinized for reasonableness based on the actual competitive impact of the employee's role and the company's market, rather than just where the employee physically resides.