What is a non-solicitation agreement?

Businesses use non-solicitation agreements to try to stop employees from poaching clients or suppliers when they leave the company. The enforceability of such agreements will depend on the legal jurisdiction in which they are drawn up and its attitude to curbing competitive activity by former employees.

Where have you heard about non-solicitation agreements?

You may have been asked to sign one yourself, especially if you work in financial services. Several cases involving social media have come to court in the US and the UK in recent years.

What you need to know about non-solicitation agreements.

As the name suggests, a non-solicitation agreement is designed to prevent former employees from actively seeking to take clients from their previous employer. They are especially prevalent in business or professional areas where relationships are of key importance. Thus, a private banker or wealth manager would be prevented from approaching individual clients. The same could be true of lawyers or accountants.

The clients themselves may have contractually agreed not to deal with former employees, but this is far from universal. Employees may be required, along with the non-solicitation agreement, to agree not to respond to an approach by one of their former employer's clients.

In an age when ex-employees and former clients can communicate easily via social networking and email, the effectiveness of non-solicitation agreements is debatable.