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The Rules: Walking the line with non-solicitation agreements

03/14/2017

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Sherrie Whatton of LBMC Staffing Solutions talks trends, best practices

Author:  Geert De Lombaerde

After hunkering down somewhat during and after The Great Recession, U.S. workers are changing more frequently these days. The Bureau of Labor Statistics last fall reported that our median tenure with our current employers is 4.2 years, down from 4.6 in 2014 and only slightly higher than the number in early 2008.

Add to that the boom in technology that has put more company intellectual property in the hands of more employees and company owners and executives should be paying more attention than ever before to protecting their assets and investments in people, says Sherrie Whatton, president and strategic partner-in-charge of LBMC Staffing Solutions. The old days of shaking on a contract, handing out golden watches and keeping things out of court are fading fast, which is why many companies continue to rely on non-compete and non-solicitation agreements.

“You’re really trying to protect the business’ revenues, clients and relationships,” Whatton says. “Courts will look at the reasonableness of being able to protect those things — especially if people have built those relationships under your brand and on your dime.”

These days, Whatton says she has seen a shift to non-solicitation agreements over harder-to-enforce non-competes and adds that “reasonable” typically means restricting former employees from calling on clients for a period of nine to 12 months and within a 50-mile radius. That, she adds, strikes a balance between people’s right to work and the desire to let commerce continue smoothly.

That said, Whatton points out that employers looking to use non-compete and non-solicitation agreements need to keep in mind that there can’t be any flexibility between what different employees are asked to sign. Deviate from a standard, she says, and you’re opening yourself up to possible discrimination claims.

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The Rules: Walking the line with non-solicitation agreements

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