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05-06-2015News

Non-solicitation agreements usually only two years valid

Early in 2015, the Supreme Court of Germany rendered a decision on the time limits of non-solicitation agreements between a company and a former shareholder. According to the ruling non-solicitation agreements are void if they exceed the time frame necessary for the protection of the parties’ interests, which is generally two years.

The Supreme Court of Germany held that the non-solicitation agreement in question was void, because the agreed time limit of five years exceeded the necessary time frame. In analogy to non-competition clauses, non-solicitation clauses are only valid if their time frame, area and subject are defined and restricted. A two year time limit is deemed to be sufficient for the protection of the interests of the parties, as the client relationship usually deteriorates by then. Additionally, non-solicitation agreements regarding employees are also limited to two years.

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