Violation Non-Compete & Non-Solicit Clauses
In the present scenario, it is the urgent need for the enterprises to protect their knowledge i.e. company’s trade secrets, customer’s data etc. To protect the knowledge of the enterprise, they seek protection under intellectual property laws but still some aspects cannot be protected by these laws. However, these enterprises never want their key personnel to start the same business or become their competitor or affect their revenues. So in order to prevent these situations, the enterprises include the Non-Solicitation and Non-Compete clause in their Employment Contract.
What is Non-Solicitation Clause?
A Non-Solicitation Clause is a clause in the employment Contract that prevents an individual from poaching employees, clients etc for his benefit or for the benefit of the competitor after leaving the company.
What is a Non-Compete Clause?
A Non-Compete Clause is a clause in the Employment Contract where one party to the contract agrees to not enter into a similar business or offer the same or similar services in competition against other party.
Both Non-Solicitation Clause and Non-Compete Clause being the part of the Employment Contract prevent the key personnel from harming the company in any manner. They take prior measures to save the confidential information or knowledge of the company. Therefore, it is must that these clauses of the Employment Contract must be known to the individual and he or she must sign it. However, if there is a breach of the clauses of the Employment Contract then the individual would be liable to pay damages or other relevant actions taken by the company.
Checklist for Violating the Non-Compete Clauses and the Non-Solicitation Clauses
If the Non-Compete and Non-Solicit clauses of the Employment Contract are violated by the individual then the company has the right to take actions against his violating acts. The company has authority to seek Injunctive Relief or Monetary Damages from the individual, if the individual had violated the clauses of the Employment Contract. Therefore, the checklist for the violating the Non-Compete Clause and Non-Solicit Clause are:
- Sending Cease Letter to Key Personnel.
The very first step the enterprise can do is to send a Desist or Cease letter to the Key Personnel involved with the violation of the clauses of the contract. The objectives of this communication are as follows:
- Used for reminding the contract terms to the personnel involved.
- Communicate that legal actions might be taken if he does not stop the violation of the contract.
This communication will be beneficial in the following manner:
- If the reply of the personnel turns to be positive then the company would be saved from the litigation charges.
- Enterprise might get valuable information and may get to know the reason of such violation that the enterprise didn’t have before.
- Show the enterprise’s reasonableness in solving disputes without involvement of the Court.
- Initiate Legal Actions
Before considering taking legal actions against the individual involved in violating the clauses of the contract the enterprise must take the following into consideration:
- That whether taking legal actions would be of any benefit to the company so that there would be no loss of the time and cost of the company.
- That the company has sufficient evidence to prove the violation done by the key personnel.
- That it would not affect the goodwill of the company.
- That it must not affect the other employees working in the enterprise and affect their performances.
- And that there are chances to win the litigation based on various legal factors.
However, if it is decided to take legal actions then the company should seek for interim relief to stop the continuation of the violation of the clauses of the employment contract. And this would prevent the further damages of the company.
The company should also try to take prior measures by mentioning the damages in the Contract Clauses that the key personnel will have to give if the he or she violates the clauses of the Contract. Therefore, the company can take following measures if it senses any of violation in the Non-Compete Clause and Non-Solicit Clauses of the Employment Contract.
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