Non-compete / non-solicitation
Also known as: Restrictive covenants, Non-poach
Restrictions on competing with the other party or soliciting its employees, customers, or suppliers for a defined period.
What it is
Non-compete clauses restrict a party from engaging in competitive activity, typically for a period after the contract ends and within a defined market or territory. Non-solicitation clauses are narrower: they forbid actively recruiting the other side's employees or pursuing its customers, without banning ordinary competition. Both are restrictive covenants, and their enforceability depends heavily on whether the scope — in time, geography, and activity — is reasonable compared to the legitimate interest being protected.
Why it matters
Restrictive covenants try to protect relationships and know-how after a contract ends, but they sit in tension with the right of people and businesses to trade and work freely. Different jurisdictions take very different views: some enforce reasonable non-competes routinely, others scrutinize them closely or restrict them outright, particularly in employment contexts. Overreaching clauses often end up unenforceable in full, leaving the drafter worse off than a narrower, well-targeted one.
Typical language
An example of how this clause often reads — illustrative only, not a template:
During the term of this Agreement and for a period of twelve (12) months thereafter, the Supplier shall not directly solicit for employment any individual who is an employee of the Customer and with whom the Supplier had material contact in connection with the Services. General public advertisements not targeted at Customer employees shall not be considered a breach of this clause.
Common pitfalls
- Scope that is too broad in time, geography, or activity to be reasonable under the governing law.
- Treating non-compete and non-solicitation as interchangeable — they are not, and the enforceability story is very different.
- Applying employment-style non-competes in jurisdictions that restrict or ban them.
- No defined "legitimate interest" being protected, making the clause look like a raw restraint of trade.
- Forgetting to carve out general advertising or inbound hires so that ordinary business activity accidentally triggers a breach.
Related clauses
Draft a contract with this clause
Open the drafting canvas with a starter prompt for non-compete / non-solicitation. You can edit every line before anything is saved.
This explainer is general information and is not legal advice.