Imagine investing years building strong client relationships and training a skilled team, only to have a former employee leave and immediately take your top clients or star performers with them. This is the exact risk that a non-solicitation agreement (NSA) is designed to prevent.

A non-solicitation agreement is a contract between an employee and their employer in which the employee promises not to solicit the company’s customers, employees, or business partners for a specified period after their employment ends. These agreements are crucial tools that protect a company’s competitive advantage, ensuring that former employees do not use their inside knowledge and business relationships to cause immediate harm to the company.

Key insights

This comprehensive guide will walk you through the essentials of non-solicitation agreements, including:

  • The key clauses and legal terms you need to know.
  • The difference between an NSA, a non-compete, and an NDA.
  • The legal requirements employers must meet to ensure the agreement is enforceable.
  • Your fundamental rights as an employee bound by an NSA in an employment agreement.

What is a non-solicitation agreement (NSA)?

A non-solicitation agreement is a type of restrictive covenant that safeguards a business’s core assets against former employees. They may be part of a broader employment or non-competition agreement, or they may be standalone contracts.

Why NSAs are vital for employers

An NSA is vital if an employee has access to proprietary company information, such as:

  • Customer lists and purchase history: Knowledge of who to target.
  • Pricing models and margins: Knowledge of how to undercut the company.
  • Internal team strengths and salaries: Knowledge of who to poach and how much to pay them.

If an employee uses this knowledge to build a competing company or join a rival against their former employer, they could cause irreparable harm to the original employer. The NSA establishes a clear, binding obligation for employees to protect and secure their employers’ intellectual property and business relationships during and after their time of employment.

Key non-solicitation clauses

A typical NSA contains clauses in an employment contract that restrict a former employee from engaging in the following activities for a defined period (e.g., 12 to 36 months):

  • Solicitation of customers: Prohibiting the employee from approaching any customer, affiliate, or business partner of the employer for purposes of seeking business arrangements in competition with the employer’s line of business.
  • Solicitation of employees: Prohibiting the employee from approaching, enticing, soliciting, or contacting any existing employee for the purpose of encouraging them to leave the company (i.e., poaching).

The employee often agrees to provide the NSA to any subsequent employers during the term of the agreement, reinforcing their contractual obligations.

When reviewing an NSA, it’s helpful to understand the legal concepts that define its structure and enforceability.

  • Restrictive covenant: A clause in a contract that limits an individual’s right to take certain actions (like competing or soliciting) for a specific time and area.
  • Non-compete agreement (NCA): A contract that prevents a former employee from entering into direct competition with the employer altogether (i.e., not working in the same field in a specific geographic area). This is distinct from an NSA.
  • Non-disclosure agreement (NDA): A contract that prevents an employee from sharing or using confidential company information, regardless of whether they solicit business.
  • Consideration: Something of value exchanged between parties to form a contract. For a new employee, the job itself is often the consideration. For an existing employee, additional payment, a promotion, or new company stock may be required.
  • Enforceability: The legal capacity of a contract to be upheld by a court. Restrictive covenants must be reasonable in scope, duration, and geographic area to be enforceable.
  • Public interest: A factor courts consider. If enforcing a contract would be unduly harmful to the public (e.g., limiting consumer choice), it may be struck down.
  • Breach of contract: The failure to perform an action promised under a contract (e.g., contacting a former client).
  • Injunction: A court order requiring a party to stop a specific action (e.g., demanding the former employee immediately stop soliciting clients).
  • Duress: Coercion or threats used to force someone into a contract; a common defense against enforcement.

Industries where NSAs are common

Non-solicitation agreements are frequently used in sectors where client relationships and specialized team knowledge are the primary drivers of success and profit.

  • Financial services: Banks, investment firms, and insurance companies use NSAs to prevent brokers and advisors from taking their books of business.
  • Technology & software: Companies rely on NSAs to protect their key developers and sales personnel who have relationships with large enterprise clients.
  • Professional services: Consulting firms, accounting firms, and legal practices need NSAs to retain their clientele, as their value is almost entirely relationship-based.
  • Staffing & recruiting: These firms depend on their lists of candidates and client companies, making NSAs crucial for protection against poaching.

Requirements for enforceable NSAs

Courts are often skeptical of restrictive covenants because they limit an individual’s ability to earn a living. To hold up in court, an NSA must generally meet several requirements, which can vary significantly by state or jurisdiction.

Requirement Description for enforcement
Legitimate business interest The employer must prove the NSA protects something truly valuable, such as trade secrets, confidential information, or unique customer goodwill.
Reasonable duration The time limit must be no longer than necessary to protect the business interest. Generally, 12 to 24 months is seen as reasonable; anything over three years is often viewed skeptically.
Reasonable scope The agreement must be narrowly tailored. It should only prevent solicitation of customers the employee actually had contact with, or employees they directly supervised or worked with.
Adequate consideration Something of value must be exchanged. For an existing employee, the contract must be supported by a new benefit (e.g., a raise, bonus, or specific training).
No undue hardship The NSA must not place an unreasonable burden on the employee’s ability to find work in their field.

Know your rights as an employee

As an employee, understanding the limitations of an NSA is crucial, as the law is increasingly shifting to favor employee mobility.

Legal limits of NSAs

  1. Passive vs. active solicitation: The agreement typically only bans active solicitation. If a former client independently reaches out to you without you initiating contact, you may generally accept their business, though this is a complex legal area.
  2. General advertising is usually fine: Taking out a general ad or posting on social media that announces your new job is usually not considered solicitation, as it’s not targeting specific former clients.
  3. Scope and jurisdiction: The NSA is only as strong as the governing law it chooses. Some states (like California) have laws that make NSAs involving non-management employees completely unenforceable. If the agreement is overly broad (e.g., banning solicitation of every customer globally), a court may refuse to enforce it or may “blue pencil” (revise) the clause to make it reasonable.

If you are presented with an NSA, it is always recommended to consult with an attorney specializing in employment law.

Document smarter with PandaDoc

Whether you’re reviewing a non-solicitation agreement or sending one out as part of an onboarding packet, having a clear, easy-to-track document workflow matters.

PandaDoc makes it simple to send, sign, and store legal agreements with full visibility into who’s seen what and when. You can even set up templates to keep your documents consistent and compliant.

Try PandaDoc today to simplify how you manage sensitive employment documents.

Disclaimer

PandaDoc is not a law firm, or a substitute for an attorney or law firm. This page is not intended to and does not provide legal advice. Should you have legal questions on the validity of e-signatures or digital signatures and the enforceability thereof, please consult with an attorney or law firm. Use of PandaDocs services are governed by our Terms of Use and Privacy Policy.

Originally published July 19, 2023, updated November 24, 2025

FAQ

No. They are distinct legal agreements, though they are often confused or packaged together.

  • An NSA restricts who you can talk to (clients, employees, partners).

A Non-Compete restricts where and how you can work (e.g., prevents you from working for a direct rival in the same city for a year).
An NSA is generally easier for an employer to enforce because it’s less restrictive on the employee’s livelihood than a non-compete.

Yes, in many cases, you can, especially if you are a desirable employee. Since consideration is key, you can often negotiate the terms, such as:

  • Reducing the Term: Shorten the restriction from 24 months to 12 months.
  • Narrowing the Scope: Limit the restriction only to clients you directly managed, or to employees in your former department.

The duration is specified in the contract, often ranging from 12 months to 36 months after the date of termination of employment. The duration must be reasonable for the company’s protection—too long, and the court may invalidate the agreement entirely.

Would you like to review PandaDoc’s non-solicitation agreement template or compare NSAs with non-compete agreements?