Non-solicitation, in

contract law A contract is a legally enforceable agreement between two or more parties that creates, defines, and governs mutual rights and obligations between them. A contract typically involves the transfer of goods, services, money, or a promise to tran ...

, refers to an agreement, typically between an employer and employee, that prohibits an employee from utilizing the company's clients, customers, and contact lists for personal gain upon leaving the company.

Non-Solicitation agreements

Non-Solicitation Agreement provisions—alongside the

non-compete clause In contract law, a non-compete clause (often NCC), restrictive covenant, or covenant not to compete (CNC), is a clause under which one party (usually an employee) agrees not to enter into or start a similar profession or trade in competition agains ...

(NCC) and the

non-disclosure agreement A non-disclosure agreement (NDA) is a legal contract or part of a contract between at least two parties that outlines confidential material, knowledge, or information that the parties wish to share with one another for certain purposes, but wish ...

(NDA) -- constitute one of three

restrictive covenants A covenant, in its most general sense and historical sense, is a solemn promise to engage in or refrain from a specified action. Under historical English common law, a covenant was distinguished from an ordinary contract by the presence of a se ...

frequently found within a business contract. They may be entered into with both employees and independent contractors—in addition to multiple entities—as part of a larger general contract or as a standalone provision.

Restrictions

Non-Solicitation Agreements are restricted by convention, jurisdiction, and terms of scope. Furthermore, enforceability has proven difficult and, in certain instances, has been deemed "very subjective".

Restraint of Trade

A Non-Solicitation Agreement that is too widely construed may violate standards of "reasonableness" (decided on a case-by-case basis). Under

common law In law, common law (also known as judicial precedent, judge-made law, or case law) is the body of law created by judges and similar quasi-judicial tribunals by virtue of being stated in written opinions."The common law is not a brooding omnipresen ...

, an overreaching agreement would be deemed a

restraint of trade Restraints of trade is a common law doctrine relating to the enforceability of contractual restrictions on freedom to conduct business. It is a precursor of modern competition law. In an old leading case of '' Mitchel v Reynolds'' (1711) Lord S ...

and thus be deemed invalid.

Jurisdictional variations

Non-solicitation agreements are restricted in certain jurisdictions, notably

California California is a U.S. state, state in the Western United States, located along the West Coast of the United States, Pacific Coast. With nearly 39.2million residents across a total area of approximately , it is the List of states and territori ...

, which prohibits such agreements for all circumstances other than the protection of company

trade secret Trade secrets are a type of intellectual property that includes formulas, practices, processes, designs, instruments, patterns, or compilations of information that have inherent economic value because they are not generally known or readily asc ...

s in all but several exceptions, a decision upheld by the

State Supreme Court In the United States, a state supreme court (known by #Terminology, other names in some states) is the supreme court, highest court in the State court (United States), state judiciary of a U.S. state. On matters of State law (United States), st ...

in 2008. In Canada, non-solicitation agreements came under restrictive scrutiny in 2016, when the Alberta Court of Queen's Bench considered the issue in ''Specialized Property Evaluation Control Services Ltd. V. Les Evaluations Marc Bourret Appraisals Inc.'' The court found that wrongfully dismissed employees are excused from enforceability both of non-solicitation and non-compete agreements, in addition to finding both agreements unenforceable unless they are reasonable and in the public interest. In the United Kingdom, in the case of Safetynet Security Ltd. v Leonard Coppage and Freedom Security Solutions Ltd., the court held that an employment contract clause preventing an individual from contacting any former customers for six months after leaving the company "had clearly been agreed to by him throughout his contract and was reasonable and enforceable".Property Litigation Association
Safetynet Security Limited v Leonard Coppage & Freedom Security Solutions Limited
publiished August 2012, accessed 20 May 2021

References

{{reflist Contract law