Is It Legally Enforceable in Delaware?
Yes. Non-solicitation agreements are enforceable if they:
- Meet general contract law requirements
- Are reasonable in scope and duration
- Advance a legitimate economic interest of the employer
- Balance the interest of the employee and the public
Non-solicitation agreements involving employment contracts are more closely scrutinized than those involving the sale of stock. (Tristate Courier and Carriage, Inc. v. Berryman, C.A. No. 20574-NC (Del. Ch. Apr. 15, 2004))
Types of Solicitation to Prohibit
In Delaware, a non-solicitation covenant can restrict a party from contacting the employer’s:
- Past or current clients and customers
- Past or current employees
- Past or current contractors
- Other business relationships (e.g. supplier, affiliates, etc.)
What to Include
Based on the state’s case law, a non-solicitation agreement must include the following in order to hold up in a court of law:
1. Time Restraint
The duration of the covenant, which typically begins at the termination of employment, must be specified in the agreement. The length of time must be considered reasonable and fair to the interests of the employee, employer, and the public.
2. Geographical Restraint
The terms of the agreement should apply to a specified geographical area that is reasonable and fair to the interests of the employee, employer, and the public.
3. Specific Action
The covenant should outline the specific parties that the employee is prohibited from soliciting. This can range from particular clients or employees to an all-encompassing list. The scope of the restricted action should be considered reasonable and fair to the interests of the employee, employer, and the public.
Related Forms
Delaware Non-Compete Agreement
Download: PDF, MS Word, OpenDocument
Delaware Non-Disclosure Agreement
Download: PDF, MS Word, OpenDocument