Non-Compete vs Non-Solicitation: What's the Difference?

Non-compete and non-solicitation agreements are both restrictive covenants that limit what you can do after leaving an employer, but they work very differently. Understanding the distinction is crucial because courts treat them differently, and one may be enforceable when the other isn't.

What is a Non-Compete Agreement?

A non-compete agreement prevents you from working for competitors or starting a competing business. It's the broadest form of post-employment restriction.

Non-Compete Restrictions Typically:

• Prohibit employment with any competing company
• Prevent starting your own competing business
• Apply regardless of your role at the new company
• Cover a geographic area and time period

Example Non-Compete Language:

"Employee agrees not to work for any company that competes with Employer's business within a 50-mile radius for a period of two years following termination."

What is a Non-Solicitation Agreement?

A non-solicitation agreement is more targeted. It prevents you from soliciting specific relationships—typically customers or employees—but doesn't prevent you from working for competitors.

Non-Solicitation Types:

Customer Non-Solicitation

Prevents you from reaching out to customers you worked with:

"Employee agrees not to solicit any customers with whom Employee had contact during the last two years of employment."

Employee Non-Solicitation

Prevents you from recruiting former colleagues:

"Employee agrees not to recruit, solicit, or hire any employee of Employer for a period of one year."

Key Differences

Aspect	Non-Compete	Non-Solicitation
What it restricts	Working for competitors	Contacting specific people
Can you work for a competitor?	No	Yes
Enforcement likelihood	Varies widely by state	Generally more enforceable
Impact on career	Severe	Moderate
Geographic restrictions	Common	Less common

Why Non-Solicitation Is Often More Enforceable

Courts generally view non-solicitation agreements more favorably because:

• Less restrictive on career: You can still work in your field
• More narrowly tailored: Protects specific relationships, not all competition
• Clearer business interest: Customer relationships are concrete assets
• Less public harm: Doesn't prevent you from earning a living

Common Pitfalls with Non-Solicitation

The "Indirect" Problem

Many agreements prohibit "direct or indirect" solicitation. This might mean you can't have a colleague reach out on your behalf or post a general job listing that former coworkers might see.

Who Contacted Whom?

If a customer contacts you first, is that "solicitation"? Many agreements don't distinguish, which can cause problems. Look for language about who initiates contact.

Definition of "Customer"

Broad definitions might include anyone you ever interacted with, even briefly. Push for limitations to customers you personally serviced or had substantial relationships with.

What to Look For

In Non-Compete Agreements:

• Is the geographic scope reasonable?
• How is "competitor" defined?
• Does it prevent any role or just similar roles?
• What happens if you're terminated without cause?

In Non-Solicitation Agreements:

• Does it cover customers who contact you first?
• How is "solicitation" defined?
• How is the customer list determined?
• Are there different rules for employee vs customer solicitation?

Negotiation Tips

If Asked to Sign a Non-Compete:

Try to convert it to a non-solicitation agreement instead. Many employers will accept this compromise because it still protects their key relationships.

If Asked to Sign Both:

Focus on narrowing the non-compete (shorter duration, limited geography) and ensuring the non-solicitation has clear boundaries.