Non-Solicitation Agreements in Rhode Island After the 2020 Law
Rhode Island's 2020 Noncompete Agreement Act
Rhode Island enacted the Rhode Island Noncompete Agreement Act (R.I. Gen. Laws Section 28-59-1 et seq.) effective January 15, 2020. This law primarily regulates non-compete agreements, and it exempts non-solicitation clauses from most of its restrictions, similar to the approach taken by Massachusetts.
What the Exemption Means
The Act defines a noncompete agreement as one that restricts an employee from working for a competitor or operating a competing business. Non-solicitation agreements, which restrict the solicitation of specific customers or employees, are not classified as non-competes under the statute. This means:
- Non-solicitation clauses are not subject to the Act's one-year maximum duration
- The Act's income threshold requirements do not apply to non-solicitation clauses
- Employers do not need to meet the Act's garden leave or consideration requirements for non-solicitation provisions
Common Law Applies
Non-solicitation clauses in Rhode Island are evaluated under common law reasonableness standards:
- Legitimate business interest: Customer relationships, trade secrets, or confidential business information
- Reasonable scope: Restricted to customers the employee actually served or had substantive contact with
- Reasonable duration: One to two years is the typical range courts have upheld
- Not overly burdensome: The restriction cannot effectively prevent the employee from working in their profession
- Adequate consideration: Employment at the time of hire is typically sufficient
Red Flags
- A clause labeled as "non-solicitation" that effectively functions as a non-compete (courts look at substance)
- Restrictions on all company customers, not just those you served
- Duration significantly exceeding two years
- Language that captures passive acceptance of business
- No consideration beyond initial employment for mid-term agreements
When to Consult a Lawyer
Consider reaching out to a Rhode Island employment attorney if your non-solicitation clause seems broad enough to function as a non-compete, if you signed an agreement during employment and are unsure about consideration, or if your former employer is threatening enforcement.
This article is for informational purposes only and does not constitute legal advice. Consult a licensed attorney for guidance specific to your situation.