Nonsolicitation Agreements
In summary, the difference between noncompetition and nonsolicitation agreements is as follows: a noncompete prohibits any competitive business activity within a certain territory. A nonsolicitation agreement only prohibits doing business with the former employer's customers or clients, regardless of where they are located. Therefore, in one sense a nonsolicitation agreement is the least restrictive form of a covenant not to compete - e.g., a person could open a competing business across the street from his or her former employer, as long as that person does not solicit the employer's customers or clients for a certain period of time.
The primary requirement for a nonsolicitation agreement is to identify the customers or clients that an employee cannot solicit. As a general rule, courts do not require that a specific geographical territory be included in the agreement - although states will differ on this point. In addition, when determining whether a nonsolicitation agreement is reasonable courts will often consider the extent to which the employee had actual contact with the customers. This distinction between a company's customer base at large (broad) versus only those customers with whom the employee had contact (narrow) can be critical to whether the agreement is considered enforceable in a given situation.
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