Non-Solicitation and Confidentiality Agreements

You may not need a non-compete, but you do need a non-solicitation and confidentiality agreement for your business.

In Indiana, non-compete agreements are generally disfavored by the law because of the uneven bargaining power possessed by the employer when they enter into contracts with an employee. Non-solicitation and confidentiality agreements, on the other hand, are more accepted by the courts because they offer more reasonable restrictions and serve more narrowly tailored business interests. Still, courts will look at the circumstances surrounding each case to determine the reasonableness of each condition, the impact the agreements may have on the employees, and the business interest sought to be protected.

What is a non-solicitation agreement, and how can it help your business?

A Non-Solicitation Agreement is a contract where an employee agrees not to solicit the company’s clients, employees, or other individuals with whom the employer works. This means that an employee would be prohibited from utilizing the company’s clients or customers for personal gain upon leaving the company. This can effectively protect your customer base and ensure your employees are not actively soliciting your clients or customers away from your business.

It’s important to note that courts are unlikely to enforce an agreement that goes beyond the reasonable geographic scope or duration necessary based upon the company’s business operations. Basically, an employee must not be subject to undue hardship, and any non-solicitation restrictions must protect a legitimate business interest.

What is a confidentiality agreement, and how can it help your business?

A confidentiality agreement is a legal document that contains a provision preventing one or more parties from disclosing confidential or proprietary information. It is often necessary to use confidentiality agreements to protect sensitive corporate information from reaching competitors or the general public.

Creating a trustworthy environment and encouraging open communication in your organization can be achieved with a well-drafted confidentiality agreement. In case of a breach of confidentiality, a well-drafted agreement provides your business with legal recourse. It allows you to seek damages, injunctions, or other appropriate remedies if the other party fails to comply with the terms of the agreement.

It’s important to note that the effectiveness of confidentiality and non-solicitation agreement depend on various factors, including the specific language of the agreement, how closely tailored they are to your business needs, and any hardships that may arise ensuring its enforceability.

If you are looking to hire a lawyer to help you draft a confidentiality agreement or a non-solicitation agreement for your business, contact McNeelyLaw today. Our experienced team of business attorneys can assist you with drafting these agreements effectively.

This McNeelyLaw LLP publication should not be construed as legal advice or legal opinion of any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own lawyer on any specific legal questions you may have concerning your situation.