Non-Solicitation Agreements: What Entrepreneurs Should Know

Losing employees and clients can significantly impact a business, especially in competitive markets like Boulder, Kansas City. Non-solicitation agreements help protect businesses from former employees or contractors poaching staff and clients after they leave. Most states enforce non-solicitation agreements, including Colorado, Kansas, and Missouri.

(You may also want to check out our guides on non-compete agreements and non-disclosure agreements, which are closely related to non-solicitation provisions.)

What is a Non-Solicitation Agreement?

A non-solicitation agreement prevents an employee or contractor from recruiting the company’s employees or soliciting its clients for a set period after leaving. These agreements are less restrictive than non-compete agreements but can still provide strong protections against unfair competition.

Non-Solicitation of Employees

Imagine this—you run a small marketing agency with five employees and several contractors. One of them resigns to take another job or start their own agency. Shortly after, they call up one of your remaining employees or contractors and convince them to leave, too.

This could create significant problems, and a non-solicitation agreement can help prevent it. The agreement typically states that for a set time period (usually between six months and two years) the former employee cannot solicit, recruit, or intentionally interfere with your workforce.

Key Considerations:

• The agreement should cover both direct and indirect solicitations, meaning the former employee cannot recruit your workers on behalf of another company.
• Some agreements allow exceptions, such as permitting hiring through a general job posting that is not targeted at a specific employee.
• Many agreements extend to independent contractors as well as full-time employees.

Non-Solicitation of Clients

Now imagine the same person reaches out to your clients and convinces them to leave your agency for their new business. Losing a client is even more damaging than losing an employee or contractor because it directly impacts revenue.

A non-solicitation agreement can prohibit former employees (and contractors) from soliciting, interfering with, or encouraging clients to leave for a competitor. Unlike a non-compete agreement, which broadly restricts competition, a non-solicitation agreement is limited to direct client relationships.

Key Considerations:

• The agreement can prohibit solicitation of current clients and, in some cases, prospective clients the employee was working with before leaving.
• Some states may limit non-solicitation clauses to only clients the employee or contractor directly interacted with, rather than all company clients.
• To strengthen protections, businesses may also use a non-compete agreement or non-disclosure agreement (NDA) alongside a non-solicitation.

Practical Tips for Using Non-Solicitation Agreements

A non-solicitation agreement is just one part of a broader strategy to protect your business. You should also consider non-compete agreements and NDAs to safeguard trade secrets and client relationships.

Best Practices:

• Standalone or integrated? A non-solicitation clause can be part of a larger employment or contractor agreement or used as a standalone contract.
• Ensure clarity – The agreement should be clear and explicitly signed by the worker.
• Know state laws – Some states impose restrictions on how broad a non-solicitation can be, particularly regarding client limitations.

Final Thoughts

Non-solicitation agreements provide an important layer of protection for businesses without being as restrictive as non-compete agreements. When properly drafted, they can help prevent loss of employees and clients while remaining enforceable in many states.

For businesses in Boulder, Kansas City, and other competitive markets, using the right agreements can protect long-term stability and growth.

*This article is general in nature and is not legal advice.