Non-Solicitation Clause

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Contract Clauses

• Acceleration Clause
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• Non-Solicitation Clause
• Privacy Clause
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Non Solicitation Clause Defined

Non-solicitation clauses are legally binding contract provisions that prohibit the solicitation or negotiation of a party. They are most often used in the non-solicitation clauses between companies or individuals to prevent them from approaching employees and customers. For many companies, it prevents competitors from “poaching” their most talented employees or profitable customers.

Here is another web page that defines solicitation clauses.

Non-Solicitation Explained

You typically sign a non-solicitation clause at the beginning of the contractual relationship. For example, employees will sign the non-solicitation clause and other documents at the start of employment or during separation. However, parties may request the other to sign at any point in between.

This article explains non-solicitation clauses in business contracts.

Purpose of a Non-Solicitation Clause

The purpose of a non-solicitation clause is to protect the business from competitors, clients, or other parties taking critical employees or contractors. This can fundamentally hurt the business if they lose their talent.

Non Solicitation Clause Examples

Examples of non-solicitation clauses include:

• Example 1: Stopping competitors from taking your employees
• Example 2: Preventing customers from approaching competitors
• Example 3: Limiting suppliers from selling to competitors
• Example 4: Stopping competitors from approaching your vendors

Non Solicitation Clause Samples

Sample 1 – Independent Contractor Agreement:

Non-Solicitation. During the Term and for one (1) year thereafter, Contractor shall not encourage or solicit any employee, independent contractor, vendor, or client of ViSalus to leave or terminate its relationship with ViSalus for any reason.

Reference:

Security Exchange Commission - Edgar Database, EX-10.11 3 d393494dex1011.htm INDEPENDENT CONTRACTOR AGREEMENT, Viewed April 5, 2021, < https://www.sec.gov/Archives/edgar/data/1552860/000119312512373041/d393494dex1011.htm >.

Sample 2 – Consulting Agreement:

Non-Solicitation/Non-Accept and Confidentiality Agreement and Release. Consultant acknowledges the Non-Solicitation/Non-Accept and Confidentiality Agreement and Release between Consultant and the Company dated March 1, 2005 (the “Non-Solicitation Agreement”) and the Transition Agreement between the Consultant and the Company dated as of October 8, 2010 (the “Transition Agreement”) remain in full force and effect in accordance with their terms.

Reference:

Security Exchange Commission - Edgar Database, EX-10.1 2 dex101.htm CONSULTING AGREEMENT, Viewed April 5, 2021, < https://www.sec.gov/Archives/edgar/data/821127/000119312510238055/dex101.htm >.

Sample 3 – Employment Agreement:

NON-COMPETITION AND NON-SOLICITATION

Prior to or coincident with the commencement date of this Agreement, Employee shall execute and deliver to the Company its standard Non-Competition and Non-Solicitation Agreement (the “Non-Competition Agreement”), a copy of which is attached hereto as Annex B.

Reference:

Security Exchange Commission - Edgar Database, EX-10.281 4 d226725dex10281.htm EMPLOYMENT AGREEMENT, Viewed April 5, 2021, < https://www.sec.gov/Archives/edgar/data/1003124/000119312511292827/d226725dex10281.htm >.

Common Contracts with Non-Solicitation Clauses

Common contracts with non-solicitation clauses include:

• Employment agreements
• Non-solicitation of customers agreements
• Supplier exclusivity agreements
• Non-disclosure agreements
• Vendor non-solicitation agreements
• Non-solicitation in consulting agreements
• Non-solicitation of employees agreements
• Subcontractor service agreements

Learn more about drafting non-solicitation clauses by reading this article.

Non Solicitation Clause FAQs

Non-solicitation clauses carry specific legal implications that can impact the outcome of your contract or business relationship. There are also non-solicitation clause exceptions to every rule.

Here are the answers to non-solicitation clause FAQs below to help:

How do you get around a non-solicitation clause?

You get around a non-solicitation clause in one of two ways. You either renegotiate the terms, or you dispute the contract’s enforceability. Some states don’t allow for non-solicitation clauses, especially if the limitations are unduly burdensome.

What is the difference between a non-solicitation clause and a non-compete clause?

The primary difference between a non-solicitation clause and a non-compete clause lies within whom it applies to and what they cannot do. Non-solicitation clauses prevent the poaching of customers and employees. Non-compete clauses limit their ability to work with your competitors.

How long does a non-solicitation clause last?

A non-solicitation clause lasts according to the length of the contract. However, they may extend long after the relationship ends. Most non-solicitation clauses last for up to one year.