Non-Solicitation Clauses in Australia: What Employers Should Know

If you’ve invested time and money building client relationships and training your team, the last thing you want is for an ex-employee to walk out the door and take customers or staff with them. That’s exactly what a non-solicitation clause is designed to manage.

In this guide, we’ll explain how non-solicitation clauses work in Australia, when your business should use one, what makes them enforceable, and how to draft them in a way that protects your legitimate interests without overreaching.

We’ll also cover where these clauses should live (employment and contractor agreements), how they interact with other tools like confidentiality, non-compete and garden leave, and practical steps if you need to enforce one.

What Is A Non-Solicitation Clause And How Does It Work?

A non-solicitation clause restricts a departing worker from proactively approaching and attempting to “poach” your clients, suppliers or staff for a period after they leave your business.

It doesn’t usually stop fair competition altogether. Rather, it targets direct approaches designed to divert business or people away from you - think sending targeted messages to your top clients or encouraging your sales manager to jump ship with their whole portfolio.

In Australia, these clauses are treated as a type of restraint of trade. That means they’re only enforceable if they go no further than reasonably necessary to protect your legitimate business interests - typically your confidential information, customer connections and workforce stability.

When Should Your Business Use A Non-Solicitation Clause?

Most small businesses benefit from having a non-solicitation clause for roles that have direct contact with clients or influence over staff. Common scenarios include:

• Sales, account management and client service roles with strong relationships and insight into pricing, proposals and buying cycles.
• Senior or specialist roles that can move a book of business or encourage team members to follow them to a competitor.
• Contractors or consultants engaged to build your market presence who may be tempted to steer clients elsewhere after their engagement ends.

The clause is usually embedded in an Employment Contract for employees, or in a contractor agreement for contractors. For sensitive projects or early-stage conversations, pairing this with a Non-Disclosure Agreement is a smart way to protect confidential information from day one.

Are Non-Solicitation Clauses Enforceable In Australia?

Yes - if they’re reasonable. Australian courts will weigh up the interests of your business against a person’s right to work and compete. Key factors include:

• Legitimate interest: Are you protecting real business value (client connections, confidential information, team stability) rather than simply stifling competition?
• Scope: Does the clause target direct solicitation (approaching clients or staff), or does it also venture into broader non-dealing or non-compete territory?
• Time period: Is the post-employment period no longer than necessary to protect your interests (for example, 3, 6 or 12 months depending on the role and sales cycle)?
• Geography: Is any geographic limit appropriate for the markets you actually serve?
• Seniority and exposure: Did the person hold a position and level of access that justifies the restraint?

In practice, reasonableness is closely tied to the realities of your industry: the length of your sales cycle, how “sticky” your customer relationships are, and the risk window for losing staff. A six-month non-solicit may be reasonable for a local service business; a longer period may be justified for complex B2B sales where relationships and deal cycles run longer.

Because these are fact-specific assessments, many employers also seek tailored Restraint of Trade Advice when setting their clauses, especially for critical roles.

What Should A Good Non-Solicitation Clause Include?

Clarity and restraint go hand in hand. A well-drafted clause should be specific enough to be enforceable, but not so broad that it becomes unreasonable. Consider including:

Clear Definitions

• Who is covered: Define “clients”, “prospective clients”, “suppliers” and “employees” with precision. Many businesses limit “clients” to those the person had material dealings with in the 6-12 months before they left.
• What “solicit” means: Spell out that it includes direct or indirect approaches, targeted proposals, or encouraging departures - not just overt “sales pitches”.

Reasonable Restraint Periods

• Use a cascading structure (for example, 12/9/6/3 months) so a court can read down to the longest reasonable period. This drafting approach improves enforceability.

Appropriate Scope

• Limit to solicitation, not general competition. If you also need a non-compete for a short window, use a separate, narrowly tailored non-compete and ensure it’s justified by the role.

Geographic Limits (If Relevant)

• If your business is local or state-based, mirror that reality. If it’s national with remote sales, the clause may not need geographic limits so long as the conduct is defined appropriately.

Companion Protections

• Link the non-solicit to confidentiality obligations and post-employment return of information. Robust confidentiality terms reduce the temptation and capability to solicit.

For senior roles, some employers also use short periods of garden leave during notice to take the heat out of key client transitions while pay continues. Garden leave works alongside restraints rather than replacing them.

Where Do Non-Solicitation Clauses Live? Contracts And Policies That Help

Non-solicitation clauses are most effective when they’re part of a consistent legal setup across your business. Consider these building blocks:

• Employment Contract: Include a tailored restraint schedule with non-solicit (and if justified, non-deal or non-compete), confidentiality, IP ownership, and notice/garden leave. Avoid “one size fits all” terms - they rarely match every role.
• Contractor Agreement: Mirror the protection for independent contractors if they will build client relationships on your behalf.
• Non-Disclosure Agreement (NDA): Use NDAs with candidates, contractors and suppliers when sharing sensitive client or strategy information before a contract is signed.
• Non-Compete Agreement: In limited cases, a short non-compete can sit beside a non-solicit to protect more sensitive transitions. It should be tightly scoped to pass a reasonableness test.
• Employee Termination Documents Suite: Exit letters and deeds can restate post-employment obligations, capture acknowledgements, and resolve issues cleanly when someone leaves.

If you operate through a company with multiple founders, aligning your employment and contractor terms with your governance documents (like any shareholder arrangements or company policies) helps ensure consistency and reduces the risk of loopholes.

How To Enforce A Non-Solicitation Clause (Without Burning Bridges)

Most disputes resolve with a pragmatic, early intervention. If you suspect solicitation is happening, you can follow a graduated approach.

1) Gather Facts Quickly

• Check what the contract actually says: dates, scope, and who is protected.
• Confirm the conduct: emails, messages, client reports or staff accounts that indicate proactive approaches.

2) Send A Clear Reminder

• Often, a measured letter to the former worker (and sometimes their new employer) pointing to the restraint and the facts is enough. Keep the tone professional and focused on specific obligations.

3) Consider A Deed To Resolve It

• Where there’s a live issue, a short deed can record undertakings not to contact specified clients or staff for an agreed period. If broader issues are involved, a well-drafted deed of release and settlement can close the matter and avoid litigation.

4) Seek Interim Relief (If Needed)

• In urgent cases - for example, where key accounts are at risk - businesses can apply for an injunction to restrain solicitation while the dispute is resolved. Success depends on the clause’s reasonableness and the evidence of solicitation.

It’s best to act promptly and proportionately. Early legal advice can help you choose the path that protects relationships and value while keeping costs and disruption under control.

Common Pitfalls (And How To Avoid Them)

Most problems with non-solicitation clauses fall into a few avoidable traps:

• Overreaching restraints: Clauses that ban all competition or last for years are unlikely to be enforceable. Keep the restraint calibrated to the role and your business reality.
• Vague definitions: If “client” or “solicit” isn’t clear, enforcement becomes hard. Define terms and limit the scope to people the employee actually dealt with.
• Outdated templates: Roles evolve. Review restraints when roles change or promotions occur so the clause matches the person’s actual exposure.
• No confidentiality backbone: Without strong confidentiality obligations, a non-solicit does a lot of heavy lifting by itself. Combine both for better protection.
• Missing handover steps: Good exit processes (revoking access, reminding obligations, capturing acknowledgments) reduce risk - your termination pack and standard exit documents matter.
• Relying only on non-compete: In Australia, non-competes are scrutinised closely. A focused non-solicit, backed by confidentiality, is often the more defensible solution.

If you’re unsure whether your restraints strike the right balance, getting bespoke restraint advice before you hire (or when someone critical departs) can save time and costs later.

Best Practices For Drafting Non-Solicitation Clauses

Here’s a practical checklist you can use when working on your next employment or contractor agreement:

• Tailor to the role: Match the restraint period and scope to the person’s seniority, client exposure and sales cycle.
• Use cascading periods: Draft stepped periods (for example, 12/9/6/3 months) and, if relevant, stepped geographic areas - giving a court options to “read down” to what’s reasonable.
• Limit to actual relationships: Protect clients and staff the person actually dealt with in the previous 6-12 months, and name key accounts where appropriate.
• Define solicitation comprehensively: Include direct or indirect approaches, active targeting and encouragement.
• Pair with confidentiality and IP: Make sure your confidentiality obligations are robust and reinforced by an NDA for pre-contract discussions where needed.
• Prepare for exits: Build reminders and acknowledgements into your offboarding letters and deeds, and consider short garden leave for senior roles during notice.
• Keep records: Maintain clear records of client relationships and who dealt with whom - this evidence matters if a dispute arises.
• Be measured in enforcement: Start with a reminder and a practical solution before escalating. Preserve goodwill with clients wherever possible.

How Do Non-Solicitation Clauses Interact With Other Restraints?

Think of your post-employment protections as a toolkit. Each tool has a specific job, and using the right combination protects you without overreaching:

• Confidentiality: Protects information itself - pricing, playbooks, client data. This operates regardless of any solicitation.
• Non-solicitation: Targets active poaching of clients, suppliers and staff. Often the most defensible restraint in Australia.
• Non-dealing: Sometimes used to prevent servicing a client even if the client initiates contact. Because it’s broader than solicitation, it needs careful justification.
• Non-compete: Prevents competing work for a period. This is the broadest restraint and attracts the most scrutiny - keep it tight, short and role-justified, or consider a separate, targeted Non-Compete Agreement where genuinely needed.
• Garden leave: Keeps the person employed (and paid) during notice, away from the market while you transition relationships.

For key hires, it’s common to combine a focused non-solicit with strong confidentiality and a short garden leave option. The right mix depends on the role and your risk profile.

Special Cases: Contractors And Business Sales

Contractors who act as the “face” of your business to clients can pose similar solicitation risks to employees. Put equivalent non-solicit and confidentiality obligations in the contractor agreement, and clearly state that client relationships belong to your business.

For business sales, restraint expectations are different. A buyer typically requires the seller to agree to broader non-solicit and often non-compete restraints for longer periods to protect the goodwill being purchased. These are more readily enforceable because they’re tied to the value of the sale itself, not an employment relationship.

Key Takeaways

• A non-solicitation clause restricts a departing worker from actively poaching your clients, suppliers or team, and is enforceable in Australia if it’s reasonable.
• Keep restraints tightly tailored to the role: define who is protected, use practical timeframes, and focus on solicitation rather than broad competition bans.
• House your clause in a solid Employment Contract or contractor agreement, and support it with confidentiality obligations and, where justified, short garden leave.
• Use cascading periods and clear definitions to improve enforceability and reduce disputes.
• If issues arise, act quickly but proportionately - a clear reminder or targeted undertakings often resolve matters without litigation.
• For critical roles or complex situations, targeted restraint of trade advice ensures your protections are robust and reasonable.

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