What is the difference between a non-solicitation clause and a non-compete clause?

What does a non-compete clause do?

A non-compete stops a former employee or contractor from working for a competing business or starting a competing business. It usually lasts for a set period of time and may include a geographic limit.

Many states restrict or ban non-competes, which can make them hard to enforce.

What does a non-solicitation clause do?

A non-solicitation clause focuses on protecting relationships. It stops a former worker from:

• Contacting your clients or customers to move their business.
• Recruiting your employees.

It does not block someone from working in their field. Because it is narrower, courts often view it as more reasonable.

Some businesses use both clauses when allowed, but non-solicitation terms are often the safer option.

What to do next

• Decide whether you need to protect markets or just relationships.
• Check your state's rules on non-competes.
• Draft narrow, clear non-solicitation language.
• Focus on protecting clients and staff, not blocking careers.

What to consider in your specific situation

While these general rules apply to many businesses, the right approach for you depends on the details of your operation and the workers you hire. 

Here are a few things to think about:

• The type of role the contractor or employee will have and how much access they'll get to clients or sensitive information.
• The exact wording and scope of the clause, including time limits and geographic limits.
• Your state's laws, which vary widely on non-competes and may also affect non-solicitation rules.
• How your business operates, including your industry, size, and whether relationships are a key asset.
• Past agreements, communications, or expectations you've set with workers.
• How much risk your business can tolerate if a clause ends up challenged or unenforceable.

Taking a moment to tailor the right approach can give you stronger protection and fewer surprises. Since every business is different, consider getting more information through Rocket Copilot, or a Legal Pro review.