Non-solicitation clause

Non-solicitation clause

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Non-solicitation clause

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Key Facts
  • A non-solicitation clause prevents the poaching of employees between parties and is relevant in the IT and media industry.
  • Legal principles include freedom of contract, labor law and antitrust law to ensure that prohibitions are lawful.
  • Typical areas of application are cooperation agreements, company purchase agreements and employment contracts that offer protection against poaching.
  • Important design aspects are the scope, time limit and territorial scope of the non-solicitation clause.
  • Legal limits include proportionality, general terms and conditions control and certainty of the enforceability clause.
  • In the IT and media industry, the shortage of skilled workers and rapid technological development are critical for the examination of such bans.
  • Companies should develop a comprehensive employee retention strategythat goes beyond non-solicitation.

A non-solicitation clause is a contractual agreement that prohibits one party from poaching or hiring employees from the other party. Such clauses are particularly relevant in the IT and media industry, as qualified specialists are often in short supply and the loss of key employees can have a significant impact on a company.

Legal basis:

1. freedom of contract: Non-solicitation clauses are based on the parties’ freedom of contract.

2. labor law: Non-solicitation agreements must be compatible with the fundamental right of free choice of occupation (Art. 12 GG).

3. antitrust law: Excessively far-reaching non-solicitation clauses can be problematic under antitrust law as agreements that restrict competition.

4. law on general terms and conditions: When used in general terms and conditions, non-solicitation clauses are subject to content review pursuant to Sections 305 et seq. BGB.

Typical areas of application:

1. cooperation agreements: Protection against poaching of employees by business partners.

2. company purchase agreements: Preventing the poaching of key employees by the seller.

3. service contracts: Protection against poaching by customers or external service providers.

4. employment contracts: Prohibition of poaching colleagues after termination of the employment relationship.

Design aspects:

1. scope of the prohibition: It must be clearly defined which employees are covered by the non-solicitation clause.

2. time limit: the duration of the non-solicitation clause should be specified, although excessively long periods can be legally problematic.

3. geographical scope: the geographical area to which the non-solicitation clause applies should be defined.

4. prohibited actions: It should be specified exactly which actions are prohibited (e.g. active speech, recruitment, etc.).

5. exceptions: Exceptions can be defined, for example for public job advertisements or existing contacts.

6. contractual penalty: A contractual penalty is often agreed in the event of infringement.

Legal limits and risks:

1. proportionality: The non-solicitation clause must be proportionate to the need for protection and must not unduly restrict the freedom to choose an occupation.

2. time limit: As a rule, non-solicitation clauses of a maximum of two years are considered permissible.

3. limits under antitrust law: Non-solicitation clauses that are too far-reaching may be inadmissible under antitrust law as agreements that restrict competition.

4. control of general terms and conditions: Non-solicitation clauses used in general terms and conditions may not unreasonably disadvantage the contractual partner (Section 307 BGB).

5. specificity: the clause must be sufficiently specific to be enforceable.

Special features in the IT and media industry:

1. shortage of skilled workers: The pronounced shortage of skilled workers in the industry can lead to a particularly critical examination of non-solicitation agreements.

2. project-related cooperation: Frequent project-related cooperation between different companies can make it difficult to distinguish between permissible and impermissible contacts.

3. rapid technological development: Rapid technological development can lead to long non-solicitation clauses appearing disproportionate.

4. network effects: In the media industry, personal networks can be particularly important, which can make it difficult to enforce non-solicitation agreements.

Strategic considerations:

1. balancing of interests: Companies must carefully weigh up the protection of their employees and flexibility in working with partners.

2. differentiation: It can be useful to differentiate between different employee groups or positions.

3. reciprocity: Non-solicitation clauses are often mutually agreed, which can increase acceptance.

4. alternative retention instruments: In addition to non-solicitation clauses, companies should also consider other instruments for employee retention such as attractive working conditions, further training opportunities or participation models.

5. enforceability: The practical enforceability of the clause should be considered, particularly with regard to the ability to prove breaches.

Conclusion:

Non-solicitation clauses are an important but also sensitive instrument for protecting companies in the IT and media industry. They can help to prevent the loss of important employees and know-how. However, they must be carefully drafted, taking into account the legal limits, in order to be effective and enforceable.

The effectiveness of non-solicitation clauses depends heavily on their concrete form and the specific circumstances of the individual case. Companies should therefore develop a holistic strategy for employee retention that takes other aspects such as corporate culture, development opportunities and remuneration into account in addition to contractual regulations.

Overall, non-solicitation clauses remain a relevant element in the drafting of contracts in the IT and media industry, but require careful consideration of interests and precise legal wording in order to be legally permissible and effective in practice.

 

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