Difference Between a Non-Solicitation Agreement and Non-Compete Agreement in Virginia
I am reading about a case out of the Eastern District of Virginia Federal Court. (The ED is all of Northern Virginia and Eastern Virginia).
There’s nothing simple about federal commercial litigation, but allow me to describe the case:
- Company A and Company B sign a contract.
- They agree company B will be allowed to provide limited services to Company A’s clients, but that they will not solicit these customers for additional services.
- Company B then lets three major corporate clients know that they, too, can provide the services that A provides.
- Company A files a breach of contract claim against company B for violating the non-solicitation provision of their agreement.
Here’s the difference between a non-solicitation agreement and non-compete agreement under Virginia law.
A non-solicitation typically states that you will not solicit, approach, offer to provide services to the customers or clients of your employer when you leave. Or, as the case above demonstrates, it could be an agreement not to provide services to a group of clients you were introduced to during employment.
A non-competition agreement is typically signed by an individual who agrees they won’t stay in the business for a certain period of time when they leave the contracting company.
Many Virginia employment contracts contain both. Many Virginia employment contracts prohibit both contacting old clients, and staying in the business for a period of time.
Also, we have found, many contracts are not very clear as to what actions are prohibited. A client called this week and asked me what the word “solicit” meant. I couldn’t tell him without reading the contract and even then, the prohibited activity may be unclear.
If you are unsure what your contract says, what you are bound to, and whether it is reasonable under Virginia law, we would be honored to evaluate your contract. Call our office for your evaluation (540) 985-0098. We help employees all over the Commonwealth.