Non-solicitation clause in a settlement agreement

Before signing, record which customers and business contacts you may or may not approach after your departure.

Avoid an excessively broad non-solicitation clause

A non-solicitation clause may restrict your contact with customers, clients and other business relations after employment ends. Do not assume that the clause automatically ceases to apply because of the settlement agreement.

Record separately whether the non-solicitation clause is waived, restricted or remains in force. Also check any customer restriction, non-compete clause and related penalty provisions.

Important

A general full and final discharge does not always prevent a dispute. Address the non-solicitation clause expressly and define precisely which business contacts, if any, remain protected.

Which aspects must be clear?

A workable provision makes clear who is covered, how long the restriction applies and which forms of contact are restricted.

Which business contacts?

Define specifically which customers or business contacts are covered by the clause. A verifiable list or clear scope helps prevent disputes.

Duration of the restriction

Record when the non-solicitation clause ends. Negotiate a shorter period if the existing duration is unnecessarily long.

Prohibited contact

Clarify whether only actively approaching a contact is prohibited or whether the restriction also covers working for a contact who approaches you.

Penalties and enforcement

Check the applicable contractual penalty and record that the employer will not enforce a waived or restricted non-solicitation clause beyond the agreed scope.

What if a full waiver is not achievable?

Negotiate a targeted restriction instead. This may be limited to contacts with whom you recently dealt personally, a shorter duration, or an exception for relationships that pre-dated your employment.

Avoid phrases such as “all business contacts” without further explanation. The wording should make clear in advance which contact is and is not permitted.

View the full negotiation guide

Review the non-solicitation clause in four steps

1Read every restrictive clause
Check the non-solicitation, customer, non-compete, confidentiality and penalty provisions.

2Map the business contacts
Identify the customers and business contacts with whom you actually worked.

3Define the restriction
Record which contacts, forms of communication and period, if any, remain covered.

4Check the final wording
Ensure that other provisions or schedules do not undo the agreed exception.

Why a legal review is advisable

The effect of a non-solicitation clause depends on its precise wording, your employment contract and the circumstances. Ambiguity may later lead to a dispute or a claim for contractual penalties.

Before signing, have the wording checked to ensure that it leaves sufficient room for your specific future plans.

Have your proposal reviewed

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