Non-solicitation agreement
This Non-Solicitation Agreement (the “Agreement”) is made as of [Effective date] between:
[Company legal name], with its principal office at [Company address] (the “Company”); and
[Restricted party legal name], of [Restricted party address] (the “Restricted Party”).
Background
The Restricted Party is or was the Company's [employee / contractor / business partner / seller of the business described in Purchase agreement name]. Through that relationship, the Restricted Party has gained knowledge of the Company's employees, customers and confidential information, and the goodwill of those relationships belongs to the Company.
In exchange for [Consideration, for example continued employment and a payment of Amount, or the purchase price under the purchase agreement], which the Restricted Party acknowledges is sufficient, the Restricted Party agrees to the restrictions below.
1. Definitions
“Restricted Period” means the period during the relationship and for [Restricted period] months after it ends for any reason.
“Covered Employee” means any person who is an employee or individual contractor of the Company at the time of the solicitation, or was one in the 6 months before it, and with whom the Restricted Party worked or about whom they obtained confidential information in the last [12] months of the relationship.
“Covered Customer” means any person or organization that was a customer of the Company, or an actively pursued prospective customer that received a written proposal, during the last [12] months of the relationship, and with whom the Restricted Party had material business dealings or about whom they obtained confidential information.
“Competing Products or Services” means products or services that are the same as, or substantially similar to and compete with, those the Company offered during the last [12] months of the relationship and in which the Restricted Party was involved.
“Solicit” means to initiate contact, directly or through someone else, for the purpose of inducing or encouraging the action described, whether in person, in writing, by phone, by social media message or otherwise.
2. Non-solicitation of employees
During the Restricted Period, the Restricted Party will not, for themselves or for anyone else, Solicit any Covered Employee to leave the Company or to reduce their work for it, or hire or engage a Covered Employee on behalf of a business that competes with the Company.
This section is not breached by general job advertisements or recruiter searches not targeted at Covered Employees, or by hiring a person who responds to those advertisements or contacts the Restricted Party on their own initiative, or whose relationship with the Company ended at least 6 months earlier.
3. Non-solicitation of customers
During the Restricted Period, the Restricted Party will not, for themselves or for anyone else, Solicit any Covered Customer to buy Competing Products or Services, or to end or reduce its business with the Company.
This section does not prevent the Restricted Party from dealing with a Covered Customer about products or services that do not compete with the Company, or from responding to a request from a Covered Customer that the Restricted Party did not Solicit, unless the Restricted Party is also bound by a separate valid non-competition obligation.
4. Non-interference
During the Restricted Period, the Restricted Party will not knowingly induce any supplier, distributor or business partner of the Company with which they had material dealings to end or materially reduce its relationship with the Company.
5. Confidential information
The Restricted Party will not use the Company's confidential information, including customer lists, pricing, pipeline and personnel information, to carry out any activity restricted by this Agreement. Any other confidentiality obligations the Restricted Party owes the Company continue to apply.
6. Reasonableness
The Restricted Party acknowledges that: the restrictions are limited in time and scope to what is reasonably necessary to protect the Company's legitimate interests in its workforce, customer goodwill and confidential information; they do not prevent the Restricted Party from earning a living in their field; and they had the opportunity to obtain independent legal advice before signing.
This Agreement does not contain a non-competition restriction. Nothing in it prevents the Restricted Party from working for a competitor, as long as they comply with sections 2 to 5.
7. Notice to new employers and clients
During the Restricted Period, the Restricted Party will tell any new employer, principal or business partner in a related field about this Agreement before starting work, and agrees that the Company may give them a copy. The Restricted Party will tell the Company of a new engagement on request, to the extent needed to confirm compliance.
8. Remedies
The Restricted Party agrees that a breach of this Agreement may cause the Company irreparable harm for which money damages are not an adequate remedy, and that the Company may seek an injunction to stop the breach in addition to any other remedy. [Where the law allows, the Restricted Period is extended by any period during which the Restricted Party is in breach.]
9. Severability of restrictions
Each restriction in sections 2 to 4 is a separate and independent obligation. If a court finds any of them unenforceable, the others remain in force. Where the law allows a court to modify a restriction to make it enforceable, the parties ask the court to do so to the minimum extent necessary; the parties understand that courts in some places, including many Canadian courts, will not rewrite an unreasonable restriction and will instead strike it out.
10. Governing law and disputes
This Agreement is governed by the laws of [Province or state] and the federal laws of [Country] that apply there, without regard to conflict-of-laws rules that would apply the law of another place.
If a dispute arises, the Company and the Restricted Party will first try in good faith to resolve it by discussion between people with authority to settle it, for at least 30 days after one of them gives written notice describing the dispute. If the dispute is not resolved in that time, either of them may start proceedings in the courts located in [City, Province or state], and each submits to the non-exclusive jurisdiction of those courts.
Nothing in this section prevents anyone from seeking urgent injunctive or other interim relief from any court with jurisdiction to protect confidential information, intellectual property or property, or to prevent irreparable harm.
11. Notices
Any notice under this Agreement must be in writing and delivered by hand, by courier, by registered mail, or by email to the address shown in the signature block or another address given by notice.
A notice is received: when delivered, if delivered by hand or courier on a business day before 5:00 PM local time at the place of receipt, and otherwise on the next business day; on the fifth business day after mailing, if sent by registered mail; and when sent, if sent by email before 5:00 PM local time of the recipient on a business day with no automated message that it was not delivered, and otherwise on the next business day.
Routine operational communications may be sent by any reasonable means, but a notice of breach, termination or a claim must also be sent by a method listed above.
12. Entire agreement and general terms
Entire agreement. This Agreement, including any schedules and documents it expressly refers to, is the entire agreement about its subject matter and replaces all earlier discussions, proposals and agreements about that subject matter, whether written or oral.
Amendments and waivers. A change to this Agreement is effective only if it is in writing and signed by each party. A failure or delay in enforcing a right is not a waiver of it, and a waiver of one breach is not a waiver of any other breach.
Assignment. No party may assign this Agreement without the prior written consent of the others, which will not be unreasonably withheld, except that an organization may assign it without consent to a successor to all or substantially all of its relevant business or assets by giving written notice. This Agreement binds and benefits the parties and their permitted successors and assigns.
Severability. If any provision is found invalid or unenforceable, it will be limited or removed to the minimum extent necessary, and the rest of this Agreement stays in full force.
Interpretation. Headings are for convenience only. The words “including” and “includes” mean “including without limitation”. Amounts are in [Currency] unless stated otherwise. A reference to a law includes any amendment or replacement of it.
Language. The parties have expressly required that this Agreement and all related documents be drawn up in English. Les parties ont expressément exigé que la présente entente et tous les documents connexes soient rédigés en anglais.
13. Counterparts and electronic signatures
This Agreement may be signed in any number of counterparts, each of which is an original and all of which together form one document.
The parties agree that this Agreement may be signed and delivered electronically, including through an electronic signature service such as eSora Sign. An electronic signature, and a signed copy delivered by email or as a PDF, has the same legal effect as a handwritten signature on a paper original, to the extent permitted by applicable law, including the U.S. Electronic Signatures in Global and National Commerce Act (ESIGN) and the Uniform Electronic Transactions Act (UETA) as adopted in the relevant state, Part 2 of the Personal Information Protection and Electronic Documents Act (PIPEDA), and provincial electronic commerce legislation in Canada.
Each party consents to receive this Agreement and related notices electronically, and agrees that the electronic record of the signing process, including any certificate of completion and audit trail, may be used as evidence that this Agreement was signed and of when it was signed.
Signatures
By signing below, the Restricted Party confirms they have read and understood this Agreement, had the opportunity to obtain independent legal advice, and sign it voluntarily. The Company representative confirms they are authorized to sign for the Company.
RESTRICTED PARTY
Name: ______________________________
Signature: ______________________________
Date: ______________________________
Email for notices: ______________________________
COMPANY REPRESENTATIVE
Organization: [Legal name of organization]
Name: ______________________________
Title: ______________________________
Signature: ______________________________
Date: ______________________________
Email for notices: ______________________________