Non-Solicitation Clauses: How To Protect Your Australian Business

Building strong relationships with clients and a reliable team takes time. Losing them overnight to a departing employee, contractor or co-founder can be devastating - not just financially, but for your momentum and reputation.

That’s where non-solicitation clauses come in. Used well, they help safeguard your client relationships and your workforce without stopping fair competition.

In this guide, we’ll explain how non-solicitation clauses work in Australia, when they’re enforceable, what to include, and practical steps to implement them across your business. We’ll also show how they fit alongside related restraints like confidentiality and non-compete terms so you’ve got a complete protection plan.

What Is A Non‑Solicitation Clause?

A non-solicitation clause is a contractual promise that a person (like an employee, contractor or seller of a business) won’t approach or “solicit” your clients, prospective clients or staff for a period after they leave your business.

It’s different from a non-compete clause. A non-compete tries to stop someone working for a competitor altogether. A non-solicitation clause is narrower - it focuses on preventing targeted approaches to your relationships (clients and staff) that you’ve invested in.

What Counts As “Solicitation”?

In practice, solicitation usually means active steps to entice someone away (e.g. calling key customers to move their business, or messaging your staff to join a new venture). It’s a good idea to define “solicit” in your contract and include examples, like direct approaches, targeted emails or messages via social media platforms.

General advertising to the public is typically not solicitation. A clause that clearly distinguishes general advertising from targeted approaches helps avoid confusion later.

Who Uses Non‑Solicitation Clauses?

• Employers looking to protect their client lists and teams when staff move on (often included in an Employment Contract).
• Businesses that rely on contractors or consultants and need post-engagement restraints in a Contractors Agreement.
• Founders and senior executives agreeing not to poach staff or clients as part of a Shareholders Agreement or executive terms.
• Buyers of a business, who typically require the seller to avoid poaching customers or staff post-completion in sale documents.

Are Non‑Solicitation Clauses Enforceable In Australia?

Yes - if they’re reasonable. Australian courts treat restraints as void unless they are no more than reasonably necessary to protect a “legitimate business interest”. For non-solicitation clauses, legitimate interests often include:

• Protecting client connections and goodwill you’ve developed.
• Safeguarding confidential information and trade secrets.
• Maintaining a stable workforce and preventing targeted poaching.

Reasonableness: Scope, Time And Geography

To be enforceable, the restraint should be carefully limited:

• Scope of people: Often limited to clients the person dealt with directly (or had “material dealings” with) in a defined period (e.g. last 6-12 months).
• Type of solicitation: Focus on active approaches to divert business or hire staff, not normal competition or general advertising.
• Duration: Common timeframes range from 3-12 months for employees and contractors, depending on seniority and risk. Longer periods might be reasonable in business sale scenarios.
• Geography: Limit by territory if relevant (e.g. the markets or regions where you actually operate).

Courts look at the specific role and industry. A narrower, targeted restraint has a much better chance of being upheld than a broad, blanket prohibition.

“Cascading” Clauses

It’s common to use “cascading” restraints - a list of alternative durations, geographies and scopes (for example, 12/9/6/3 months), with wording that lets a court choose the longest option it considers reasonable. This can improve enforceability, but the clause still needs to be sensible for your context.

New Vs Existing Employees (Consideration)

For new hires, the non-solicitation clause is part of the bargain when they accept the job. For existing employees, adding a restraint later usually requires their agreement and additional consideration (e.g. a promotion or bonus) to be binding. Plan your rollout carefully and take advice if you’re updating terms mid-employment.

Practical Enforcement

If someone breaches a reasonable non-solicitation clause, courts can order an injunction (to stop the behaviour) and award damages. Evidence matters, so keep good records (client lists, access logs, communications). Often, a well-drafted letter of demand backed by a clear clause resolves issues early.

Because this area is nuanced, it’s wise to get tailored restraint of trade advice before enforcing or updating your clauses.

What Should A Good Non‑Solicitation Clause Include?

The best clauses are clear, targeted and practical. Consider these elements when drafting:

1) Define The Protected Relationships

• Clients and prospects: Define “Client” and “Prospective Client”, and consider limiting protection to those with whom the person had direct or recent dealings. You can also cover entities in your supply chain if relevant.
• Employees and contractors: Include a non-poach of your “Personnel” so ex-staff can’t target your team.

2) Set A Reasonable Period And Area

• Time: Align duration with seniority and risk. Shorter is often more defensible for junior roles; longer can be reasonable for senior roles or business sales.
• Geography: Only include areas where your business actually operates or where the person had influence.

3) Clarify What “Solicit” Means

• Include examples of prohibited conduct (direct approaches, personalised emails or messages, introductions with intent to divert) and carve out general advertising not targeted at your clients or team.

4) Link To Confidential Information

• Combine with a robust confidentiality clause and, where appropriate, a Non-Disclosure Agreement (NDA) for third parties. Restraints are more defensible when part of a broader strategy to protect trade secrets and client data.

5) Include “Cascading” Alternatives (Optional)

• Offer multiple timeframes/areas using cascading wording, so a court can enforce what’s reasonable even if a longer option is not.

6) Return Of Property And Exit Duties

• Require return (or secure deletion) of information and devices, disable access, and restate post-employment obligations at exit. This complements non-solicitation protections and reduces risk.

7) Social Media And Indirect Approaches

• Address “indirect” solicitation (e.g. asking a colleague to make the approach) and consider a sensible position on targeted social outreach to your client lists.

How Do Non‑Solicitation Clauses Fit With Other Restraints And Documents?

Non-solicitation clauses work best as part of a small “toolkit” that manages different post-employment risks. Each tool covers a specific gap, and together they offer balanced protection without overreaching.

Confidentiality And Trade Secrets

Every role handling sensitive information should have strong confidentiality terms. Non-solicitation reinforces this by stopping targeted approaches, but confidentiality is what prevents misuse or disclosure of the information itself. If you’re comparing concepts, it helps to understand the difference between privacy and confidentiality - privacy laws deal with personal information, while confidentiality obligations protect broader business information.

Non-Deal And Non-Compete

• Non-deal: Prevents the person from doing business with specified clients even if the client approaches them (useful where close relationships make “no approach” hard to police).
• Non-compete: Restricts working for a competitor or starting a competing business for a time. These are the most intrusive and must be tightly drafted to be reasonable and enforceable.

In many cases, a well-calibrated non-solicit and non-deal, plus confidentiality, gives strong protection without relying on a heavy non-compete. This is better for enforceability and staff goodwill.

Garden Leave

If appropriate, consider placing senior staff on paid notice with limited duties to protect relationships while they transition, often called garden leave. Garden leave is not a restraint after employment; it’s a practical way to manage risk during the notice period.

Where Do These Clauses Live?

• Employment and executive contracts for your team.
• Contractor and supplier agreements for non-employee personnel.
• Founder documents (like a Shareholders Agreement) to stop internal poaching if someone exits the founding team.
• Business sale agreements and transitional deeds when you buy or sell a business.

Steps To Introduce Or Update Non‑Solicitation Protections

Rolling out or refreshing restraints doesn’t have to be difficult. Here’s a practical approach you can follow.

1) Map Your Legitimate Interests

List the relationships you need to protect (key clients, strategic partners, critical staff roles). Identify who in your business has influence over them.

2) Calibrate By Role

Design different versions for different levels. Senior client-facing roles may justify longer or broader restraints than junior support roles. The closer the person is to those relationships, the stronger (and more defensible) the restraint can be.

3) Choose The Right Document

• Employees: Include in your standard Employment Contract (and executive terms if needed).
• Contractors: Include tailored non-solicitation and confidentiality terms in your Contractors Agreement.
• Founders/senior leaders: Reinforce with restraints in your Shareholders Agreement and any equity documents.

4) Draft Clear, Reasonable Clauses

Use plain English. Define who’s protected, what conduct is restricted, and for how long and where. Consider a cascading framework. Align the clause with your confidentiality provisions and post-exit processes (return of property, access removal).

5) Consult And Obtain Agreement (Existing Staff)

For existing team members, discuss the change, explain the business rationale and obtain written agreement. If you’re introducing new restraints mid-employment, ensure there is fresh consideration (for example, a promotion, pay review or bonus) so the variation is binding.

6) Tighten Operational Controls

Legal terms work best with good operational hygiene. Limit who can access full client lists, use tiered permissions in your CRM, and keep accurate logs. At exit, run a thorough checklist (devices, drives, accounts, forwards, and return of materials).

7) Reinforce At Exit

At offboarding, reissue a copy of the restraint and confidentiality obligations and record acknowledgements. If there’s a negotiated departure, you may package obligations into a settlement deed; if so, structure it as a deed because of the additional formality and enforceability associated with a Deed in Australian law. Where a dispute needs to be finalised, a Deed of Settlement can document releases and set clear post-exit obligations.

8) Monitor And Act Proportionately

If you suspect solicitation, gather facts first. Consider a measured letter of demand attaching the signed clause. If urgent harm is occurring (e.g. major client diversion), speak with a lawyer about interim steps, including potential injunctions.

Common Drafting Pitfalls (And How To Avoid Them)

Overly Broad Restraints

Restraints that cover all clients in Australia for two years are unlikely to be enforceable for most roles. Narrow by time, geography and the relationships the person actually influenced.

Vague Definitions

If “Client” includes anyone who’s ever enquired, you may be overreaching. Use objective, recent timeframes (e.g. “a person or entity that purchased goods or services in the 12 months before termination”).

Ignoring Role Differences

Copy-pasting the same clause for a junior warehouse role and a senior account director isn’t ideal. Calibrate by role so the clause reflects your real risk profile.

Missing Confidentiality Backbone

Non-solicitation is more defensible when backed by strong confidentiality and IP ownership terms. Make sure your agreements include both.

No Plan For Existing Staff

Rolling out new restraints without a proper variation process (and consideration) risks unenforceability. Plan the change process, communicate clearly, and document acceptance.

FAQs: Quick Answers To Common Questions

Can I Stop A Former Employee From Working For A Competitor?

Sometimes, but it’s harder to enforce than a non-solicitation clause. Non-competes must be tightly drafted and reasonable. In many cases, a targeted non-solicit and non-deal plus confidentiality provide strong, enforceable protection without restricting someone’s right to work.

How Long Should A Non‑Solicitation Period Be?

It depends on the role and industry. For employees, 3-12 months is common. In a business sale, longer periods can be reasonable. Consider cascading options to improve enforceability.

Does General Advertising Breach A Non‑Solicitation Clause?

Usually no, if it’s not targeted at your clients or team. Define “solicit” and exclude general advertising to reduce ambiguity.

What If A Client Approaches The Former Employee?

A non-deal restraint can stop the person from doing business with specified clients even if approached. If you need this extra layer, include it clearly and keep it reasonable.

Can I Use Garden Leave Instead?

Garden leave helps during the notice period by controlling access and managing handovers, but it doesn’t protect you after employment ends. It’s best used alongside clear post-employment restraints like non-solicitation.

Key Takeaways

• Non-solicitation clauses protect your hard-won client relationships and team from targeted poaching after someone leaves.
• In Australia, restraints are enforceable if they are reasonable and protect legitimate business interests, so tailor scope, time and geography to the role and risk.
• Draft clearly: define “solicit”, identify protected clients and staff, include sensible timeframes, and reinforce with confidentiality obligations.
• Use the right documents: build protections into your Employment Contract, Contractors Agreement and founder or investor documents like a Shareholders Agreement.
• Combine tools - non-solicit, non-deal, confidentiality, and (if appropriate) garden leave - for balanced, practical protection that’s more likely to be upheld.
• Plan your rollout for existing staff, ensure valid agreement and consideration, and get targeted legal advice on restraints before enforcing.

If you’d like a consultation on strengthening non-solicitation protections for your business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.