No personal solicitation: Overview, definition, and example
What is no personal solicitation?
"No personal solicitation" refers to a restriction or prohibition on employees, contractors, or representatives from personally soliciting business, customers, or clients for their own benefit or on behalf of another company, typically after leaving their current employment or business relationship. This clause is commonly included in employment contracts, non-compete agreements, or business partnerships to prevent individuals from using the relationships and trust they’ve built during their employment or association to gain business or employment opportunities elsewhere.
For example, an employee who leaves a company may be restricted from approaching current clients or customers to persuade them to move to a competitor or to engage in business with the individual personally.
Why is no personal solicitation important?
"No personal solicitation" clauses are important because they help protect a company's business interests, client relationships, and confidential information. Without such clauses, former employees or business partners might use their inside knowledge to lure customers or clients away from the company, potentially causing financial harm or damaging the company’s reputation. This provision helps ensure that employees maintain professional boundaries and do not misuse their position for personal gain after the business relationship ends.
For businesses, these clauses offer protection by preventing the loss of valuable clients and sensitive information. For individuals, it helps clarify what is and isn’t acceptable behavior when leaving a company or business partnership.
Understanding no personal solicitation through an example
Let’s say a senior salesperson at a marketing firm leaves the company to join a competitor. If the employee is bound by a "no personal solicitation" agreement, they would be prohibited from contacting their former clients and offering to work with them directly or through their new employer. If the salesperson violates the agreement, they could face legal action for soliciting clients in a manner that competes with their previous employer.
In another example, a business owner who hires a consultant may include a "no personal solicitation" clause in the contract to prevent the consultant from reaching out to the company's clients for personal business or future opportunities once their contract ends.
An example of a no personal solicitation clause
Here’s how a clause like this might appear in an employment contract or business agreement:
“The Employee agrees that, during the term of this Agreement and for a period of [X] months/years following its termination, they will not personally solicit or attempt to solicit business from any of the Company's clients, customers, or business partners for their personal gain or for the benefit of a competitor.”
Conclusion
The "No personal solicitation" clause is an important provision that helps protect businesses from losing clients or confidential information due to employees or partners soliciting business after the end of their professional relationship. It sets clear boundaries regarding acceptable behavior after an individual leaves a company or business, ensuring that client relationships and company interests remain secure. This provision is crucial for maintaining business continuity, protecting proprietary information, and ensuring fairness in competitive markets.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.