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Contract - Non Solicitation Clause, Duration

By mark ·
I am currently reviewing a contract for a client and the vendor of a bespoke S/w application (VB6)is insisting on the following:-
"As part of this agreement, and for a period of 3 years from its terminiation date, Company A will not employ either directly or indirectly through any associated company or offer employment to any person employed by or acting on behalf of Vendor B(S/W Developer)"

My difficulty is with the period of "3 years", I feel "1 year" is adequate and is in my experience the industry norm.
The vendor is arguing that S/w Development should be considered differently due the expenses associated with Training etc.

Your comments are appreciated.



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One year is standard but they can do anything they can get away with.

by DC_GUY In reply to Contract - Non Solicitat ...

I have found one year to be the norm also. But that does not stop firms from including more draconian language in their contracts.

Each state's court system follows its own rules about what is a reasonable time period. Many of them would not enforce a three-year wait but I think most of them would accept two years. The company's lawyers have surely done their homework and know that their particular home state will enforce three years.

If the vendor's employees do not live and work in the vendor's state and if the client firm is also in a different state, you could have a three-way jurisdictional dispute. California, for example, will simply assume jurisdiction and allow the client or one of its employees to sue the vendor in a California court. It would probably not only invalidate the three-year wait but also enjoin the company from ever pulling that stunt again.

Different states will also have different opinions on the argument that "software development is different." In California, where a quarter of the population are software developers (and that is just the citizens), the judge would burst out laughing.

If the vendor terminates an employee without cause, all bets are off. In most states, courts will rule that a former employer has almost no right to interfere with a terminated-at-will employee's job search.

Over the years I have observed that MOST companies will not enforce a non-compete agreement if there's no question of industrial espionage. Nobody in their right mind wants a disgruntled employee on their staff.

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