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Insights and Expertise

Why reviewing non-compete and

non-solicit laws is essential

By Leo Azurmanyan
Global Legal Law Firm
N on-compete and non-solicit agreements are legal tools businesses use to protect their interests by limiting cer-

tain activities of employees, independent contractors or business partners during and after their relationship
with the company.

While they share a common goal of safeguarding business assets, their focus and scope differ:

• Non-compete agreements: These agreements restrict an individual from working for competitors or starting a com-
peting business within a specific geographic area and timeframe. They are typically used to protect trade secrets,
proprietary information and client relationships from being leveraged against the business.

• Non-solicit agreements: These agreements prevent individuals from soliciting a company's employees or custom-
ers for their own benefit or the benefit of another organization. Non-solicits typically come in two primary forms:

• Employee non-solicits: Prohibit the solicitation or recruitment of a company's employees.

• Customer non-solicits: Restrict the solicitation of a company's clients or customers to divert business.
Key differences between the two
The following illustrates the distinctions between non-complete and non-solicit agreements:

While non-compete agreements are often seen as more restrictive and face greater legal challenges, non-solicit agreements
are generally more acceptable to courts because they are perceived as less intrusive to an individual's ability to earn a
livelihood.

Variability across states: a snapshot
State laws governing non-compete and non-solicit agreements range widely across the United States. Some states impose
minimal restrictions, allowing these agreements to be broadly enforceable under reasonable conditions, while others
impose strict limitations or outright bans.

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