Non-Compete Vs. Non-Solicitation Agreements: What Is the Difference?

 Posted on November 19, 2021 in Business Law

Employment contracts, severance agreements, and other types of contracts will often contain clauses that restrict a person from taking certain actions or engaging in certain activities. These are known as “restrictive covenants,” and they are used to protect the interests of a company, ensure that its trade secrets and proprietary practices will not be disclosed, and prevent unfair competition. Restrictive covenants may include both non-compete and non-solicitation agreements. If a person is accused of violating these agreements, a company may pursue litigation to address the harm suffered due to the violation. By understanding what these agreements cover and when they may be enforced, the parties in these types of disputes can determine their best options for resolving any disputes that may arise.

Differences Between Non-Solicitation and Non-Compete Agreements

Restrictive covenants place limits on the types of business activities that a person can engage in. A company may ask employees to agree to these terms to ensure that a person will not engage in unfair business practices that may cause the company to suffer financial losses. 

Non-compete agreements will place restrictions on the types of work or business activities a person can perform. These clauses may state that a person cannot work for a competitor of the company after the end of their employment, or they may be prohibited from starting a new business that directly competes with their former employer. 

Non-solicitation agreements address a person’s relationship with others. They may restrict a person from contacting a company’s current employees and offering employment with another company. A person may also be prohibited from contacting a company’s clients and offering to provide them with goods or services, and they may also be restricted from working with a former employer’s vendors or suppliers. These agreements are often created in conjunction with non-compete agreements, and they are meant to ensure that a company will be able to maintain sufficient staff, while also preventing a person from using inside knowledge of a company’s relationships to directly compete against it.

In Florida, companies are allowed to use non-compete agreements, non-solicitation agreements, or other restrictive covenants as long as they are intended to protect legitimate business interests. Any restrictions placed on a current or former employee must be reasonable, and they will generally only apply for a limited period of time. Depending on the types of restrictions, a person may only be prohibited from engaging in business activities or communicating with certain parties within a specific geographical area, which will generally include the area where a person's former employer conducts business operations or where the person engaged in sales or other activities while working for a company.

Contact Our Oakland Park Restrictive Covenant Litigation Attorneys

If your company needs to address the violation of a non-compete or non-solicitation agreement, or if you want to understand your rights as a former employee, The Elliot Legal Group, P.A. can provide the legal help you need. We will advise you of your options for addressing these matters through litigation, and we will advocate for your interests throughout the legal process. Contact our Sunrise business litigation lawyers at 754-332-2101 to arrange a confidential consultation.

Sources:

https://www.flsenate.gov/Laws/Statutes/2018/0542.335

https://www.investopedia.com/terms/n/noncompete-agreement.asp

https://corporatefinanceinstitute.com/resources/knowledge/other/non-solicitation-agreement/