Non-solicitation: Overview, definition and example
What is non-solicitation?
A non-solicitation clause in a contract prevents one party from actively approaching or enticing employees, clients, or customers away from the other party. Unlike a non-compete, which focuses on avoiding direct competition, non-solicitation specifically restricts poaching or recruiting individuals or businesses tied to the original party.
For example, if an employee leaves a company, a non-solicitation clause might prohibit them from trying to hire their former coworkers or convince clients to follow them to their new job or business.
Why is non-solicitation important?
Non-solicitation is important because it helps businesses protect their workforce, customer base, and other key relationships from being unfairly targeted after a contract or employment ends. It ensures stability by preventing former employees, partners, or contractors from disrupting operations or undermining the company’s competitive position.
For businesses, non-solicitation clauses act as a safeguard against losing valuable assets, such as trained staff or loyal clients. At the same time, these clauses must be reasonable in scope and duration to be enforceable, as courts may strike down overly broad restrictions.
Understanding non-solicitation through an example
Imagine a sales manager leaves a company to join a competitor. A non-solicitation clause in their contract prevents them from contacting their former clients to switch over to the new company. If they try to lure those clients away, they would be violating the agreement.
In another case, a departing business partner might be restricted from recruiting employees from the company they helped build. For example, if a co-founder leaves a startup, a non-solicitation clause could prevent them from hiring engineers from the company’s team for their next venture.
An example of a non-solicitation clause
Here’s how a non-solicitation clause might look in a contract:
“The Employee agrees that, for a period of one (1) year following the termination of their employment, they will not directly or indirectly solicit, recruit, or hire any employees or clients of the Employer with whom they had business contact during their employment.”
Conclusion
A non-solicitation clause is a powerful tool for protecting a business’s relationships with its employees and customers. It ensures that departing individuals cannot disrupt operations by poaching talent or clients, helping the business maintain stability and focus on growth.
By clearly defining the scope, duration, and activities restricted under a non-solicitation clause, businesses can strike a balance between protecting their interests and avoiding overly restrictive terms that might be challenged in court. It’s an essential safeguard in competitive industries.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.