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Non-Solicitation Agreement Template

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non-solicitation agreement is a contract that prevents an employee from persuading former clients and coworkers to join them at a new company. It is commonly issued when onboarding new employees, although the contract can be signed at any point after employment begins as long as the necessary consideration is provided.

By State

Contents

What is a Non-Solicitation Agreement?

non-solicitation agreement is a restrictive agreement that, once signed, bars an employee from poaching a business’s personnel, contractors, customers, or clients after leaving the company. The agreement can be used as a standalone contract or as a clause within a broader agreement, such as an NDA or non-compete.

When to Use

Many employers include non-solicitation clauses or standalone agreements in the onboarding process for every employee. While this type of “blanket” protection is technically permitted, many states require non-solicitation agreements to cover a specific business interest. Examples include customer relationships, client lists, and specialized training provided to employees.

The following are situations in which the agreement can be used:

  • To prevent the owner of a company from taking key employees after a sale or dissolution.
  • To prevent employees with access to confidential client lists from soliciting the clients post-employment.
  • To prevent an employee with a new business from poaching existing staff.
  • To retain employee-created patents, trade secrets, and other valuable data (must be established beforehand that all employee-created items are company-owned).

Non-Solicitation vs. Non-Compete

Both non-solicitation and non-compete agreements are employment contracts designed to restrict an employee’s ability to disrupt a business’s competitive advantage.

Of the two, non-compete agreements are considerably more restricting. The form prevents employees from working in a specific industry or with specific competitors following the end of employment. Non-competes will often specify the geographic area it affects (such as a city, state, or another territory) and the length of time the employee will be bound to it (e.g., 2 years).

Because non-compete agreements directly affect a person’s ability to work and make a living, they are considerably more difficult to enforce in a court of law. Whereas the courts generally favor non-solicitation agreements as they do not interfere with where (or with whom) an employee works following their termination.

Importance of Consideration

In order to be enforceable, all contracts must have consideration. Consideration is anything of value provided in exchange for signing a contract. Nearly all state laws consider employment as valid consideration, as long as the form is signed at the time of hiring. Mid-term agreements, which are contracts signed by existing employees, could potentially involve additional consideration, which can come in the form of money, vacation days, or another type of reward or benefit.

Laws: By State

Note: Nearly all states require non-compete and non-solicitation agreements to be reasonable. This includes having an explicit purpose, avoiding overly broad terms, and containing limited scope and duration.

LEGEND:

  • – Permitted
  • X – NOT Permitted
  • ? – Unclear
  • EMPL? = If Employee Non-Solicitation agreements are permitted in the state
  • CUST? = If Customer Non-Solicitation agreements are permitted in the state
STATE EMPL? CUST? ENFORCEABILITY STATUTES
AL Restrictive covenants must comply with Alabama statutes. § 8-1-190
AK No NSA-specific enforceability requirements. Not applicable
AZ Enforceable to protect customer relationships, confidential information, and other trade secrets. Not applicable
AR Enforceability varies between customer and employee non-solicitation agreements. Not applicable
CA ? ? Generally prohibited, but may be enforced in rare instances. § 16600
CO ? Customer non-solicitation agreements are only enforceable against highly paid workers. § 8-2-113(2)(d)
CT ✓  Must comply with Connecticut’s non-compete laws. Not applicable
DE Enforceable under common law requirements for non-competes. Not applicable
FL ? ✓  Must protect customer relationships or other legitimate business interests. §§ 542.33 – 542.335
GA ✓  Terms must be reasonable in protecting a legitimate business interest. § 13-8-50 & § 13-8-53
HI Enforceable if compliant with laws on restrictive covenants. § 480-4
ID Can only be enforced against “key” employees or contractors. § 44-2701 – § 44-2704
IL Enforceable if the restricted party earns more than $45,000. 820 ILCS 90/10(b) & (c)
IN Enforceable if reasonable and necessary to protect a valid interest. Not applicable
IA ? ✓  May be enforced under Iowa common law. Not applicable
KS ? ✓  No enforceability requirements mentioned in state statutes. Not applicable
KY Enforceable under Kentucky common law. Not applicable
LA Cannot exceed two (2) years after the restricted party’s termination or departure. RS § 23:921
ME Cannot be executed between two (2) employers. Not applicable
MD Examined like non-competes. Md. Code, Lab. & Empl. § 3-716
MA Must be reasonable as determined by a court of law. § 24L (a)
MI Enforced less stringently than non-competes. § 445.774a
MN Enforced less stringently than non-competes. Not applicable
MS Terms must be reasonable. Not applicable
MO Must protect employer interests or last no more than one (1) year. § 431.202
MT Courts don’t look favorably on restrictive agreements for employees. § 28-2-703
NE Only applies to customers the employee worked with. Not applicable
NV ? Invalid if the customer/employee initiates contact. § 613.195(2)(b)
NH The agreement’s terms must be reasonable. Not applicable.
NJ Analyzed as non-compete. Not applicable
NM Must protect employer’s interests. Not applicable
NY Analyzed as non-compete. Not applicable
NC Analyzed as non-compete § 75-2
ND X No NSA-specific enforceability requirements. Not applicable
OH Enforceable under common law requirements for non-competes. Not applicable
OK Non-solicitation agreements are enforceable in accordance with state law. Title 15, § 219A and § 219B
OR Specifically excluded from state law requirements; enforced by common law. § 653.295(5)(b)
PA Non-solicitation generally falls under non-compete common law. Not applicable
RI Specifically excluded from state law requirements; enforced by common law. § 28-59-2(8)(i)+(ii)
SC Non-solicitation falls under non-compete laws. Not applicable
SD ✓  Cannot exceed two (2) years past employment date. §§ 53-9-8 to 53-9-12
TN Non-solicitation falls under non-compete laws. Not applicable
TX   Non-solicitation falls under non-compete laws. § 15.50, § 15.51, & § 15.52
UT Not mentioned in state statutes. Not applicable
VT No NSA-specific enforceability requirements. Not applicable
VI Non-solicitation falls under non-compete laws. Not applicable
WA Analyzed as a non-compete. Not applicable
WV Analyzed as a non-compete. Not applicable
WI Non-solicitation falls under non-compete laws.  § 103.465
WY Non-solicitation falls under non-compete laws. Not applicable

Sample Non-Solicitation Clause

A non-solicitation clause can be added to an existing employment contract to prevent the need to sign two (2) separate agreements. The following is a sample clause that can be customized to the needs of the employer:


Related Forms (2)

Non-solicitation agreements are often paired with the following forms:

Non-Compete Agreement – Prevents departing employees from competing with their employer, whether on their own or through employment with another business.

Download: PDF, Word (.docx), OpenDocument

 


Non-Disclosure Agreement – A contract that requires recipients of highly confidential information not to disclose what they learned to anyone not permitted.

Download: PDF, Word (.docx), OpenDocument

 


Frequently Asked Questions

What happens if a non-solicitation agreement is broken?

If a former employee breaches a valid non-solicitation agreement, the business can seek restitution in the following ways:

  • Injunctive Relief. This is a court order that stops the former employee from continuing to solicit customers or employees.
  • Damages. This can be a set sum of money or the amount of money that the employer lost due to the breach of the contract.
  • Attorneys’ Fees. The contract can stipulate that the losing party has to cover the cost of the other party’s attorneys’ fees.

Do non-solicitation agreements need to be notarized?

No. There is no statutory requirement in any of the 50 states stipulating that non-solicitation agreements must be notarized. They only require the employer and employee’s digital or handwritten signature.

When is a non-solicitation agreement enforceable?

Aside from state-specific requirements, non-solicitation agreements are enforceable when they contain terms that only restrict what is necessary to protect the entity and nothing more.

Additionally, non-solicitation agreements that prevent workers from earning an income will rarely be enforced. The following list includes a number of qualities that an enforceable non-solicitation agreement will have:

  • Mentions specific customers or employees that are off-limits.
  • Has a reasonable term (e.g., 1 year).
  • Contains fair geographical limits.
  • Binds an employee who has specialized skills (i.e., should not be issued to entry-level employees).
  • Does not restrict an employee that provides an essential service (e.g., health care professionals).

Can an employee be forced to sign a non-solicitation agreement?

No. No person or entity can force another person to sign a contract. However, if an entity requires all new hires to sign a non-solicitation prior to employment, the business can refuse to hire any employee who does not sign.