Non-Solicitation Clauses In Australia: What They Are And When To Use

If you’ve invested time and money building your client base and team, the last thing you want is an ex-employee or contractor walking out the door and taking your customers or staff with them.

That’s where a non-solicitation clause comes in. It’s a simple restraint that, when drafted properly, can protect your relationships and revenue without going overboard.

In this guide, we’ll explain what a non-solicitation clause is, when you should use one, how enforceability works in Australia, drafting tips, and where to include these obligations across your contracts. We’ll also share practical steps you can take beyond the contract to reduce risk.

What Is A Non-Solicitation Clause?

A non-solicitation clause prevents a person (usually an employee, contractor, former owner, or partner) from approaching or “poaching” your clients, prospective clients, suppliers, or staff for a period of time after the relationship ends.

Put simply, it’s about protecting your business relationships - not stopping someone from working in their field altogether. That distinction matters for enforceability.

Non-solicitation restraints commonly cover one or more of the following:

• Clients and customers (including prospective clients you’ve actively pitched)
• Employees and contractors (anti-poaching of your team)
• Suppliers and partners (where those relationships are critical to service delivery)

You’ll often see non-solicitation paired with a confidentiality obligation and, in some cases, a non-compete agreement. They each serve different purposes, but non-solicitation is usually more targeted and easier to enforce when drafted well.

When Should Your Small Business Use A Non-Solicitation Clause?

Most small businesses benefit from non-solicitation restraints whenever someone has access to your customer relationships or team. Typical scenarios include:

• Employment contracts for client-facing roles, sales, account management, or leadership positions
• Contractor agreements where you’re sharing client lists or embedding contractors into your delivery teams
• Business sale agreements (the seller promises not to solicit the clients they just sold you)
• Joint ventures, distribution, or referral arrangements where parties exchange client opportunities

As a rule of thumb, the more exposure someone has to your clients or workforce, the more important it is to include non-solicitation. In employment and contractor settings, this sits alongside confidentiality (to protect your information) and IP ownership terms.

For employees, make the non-solicitation clause part of the Employment Contract. For contractors, include it in your Contractor Agreement. If you’re buying or selling a business, it belongs in the Business Sale Agreement.

Are Non-Solicitation Clauses Enforceable In Australia?

Yes - if they’re reasonable. In Australia, restraints are generally presumed void unless they’re reasonably necessary to protect a legitimate business interest.

Here’s how courts typically assess reasonableness:

• Legitimate interest: Are you protecting something real - like client connections, confidential information, or the stability of your workforce?
• Scope of activities: Does the clause target “solicitation” (active approach) rather than prohibiting someone from working at all?
• Who’s covered: Is the restraint limited to clients or staff the person actually dealt with, or a reasonable subset (for example, those they had material contact with in the last 12 months)?
• Duration: Is the time period no longer than necessary (often months, not years, in an employment or contractor context)?
• Geography: If relevant, is any geographic scope tied to where your business operates or where the person worked?

In New South Wales, the Restraints of Trade Act 1976 (NSW) allows courts to “read down” or modify restraints to make them reasonable. Elsewhere in Australia, courts may sever overly broad parts, but the safer path is to draft your clause with cascading options (for example, 3/6/12 months) so a court can choose the shortest reasonable period if needed.

Non-solicitation is typically more enforceable than a blanket non-compete because it’s narrower and focuses on active poaching. Still, the clause must fit the role and the reality of your business.

How To Draft A Fair And Effective Non-Solicitation Clause

Getting the balance right is key. You want to protect your client and team relationships, while keeping the clause proportional so it stands up if challenged.

1) Anchor It To A Legitimate Business Interest

Make it clear you’re protecting client connections, goodwill, confidential information, and workforce stability. Avoid language that looks like a blanket ban on working.

2) Define “Solicit” (And Exclude Passive Scenarios)

Spell out what “solicitation” means - for example, directly or indirectly approaching, persuading, or encouraging a client or staff member to move. Carve out passive situations (like a client independently approaching the person, or responding to a general job ad not directed at your team).

3) Limit It To People Or Clients That Matter

Restrict the clause to clients and staff the person had dealings with or learned about through your business in a set look-back period (e.g. the last 12 months). Overreach is a common reason restraints fail.

4) Use Reasonable Timeframes (With Cascading Options)

Choose a period that reflects the real risk to your business - often 3 to 12 months for employment or contractor settings. In sale-of-business contexts, longer periods may be reasonable because the buyer paid for the goodwill.

5) Consider Geographical Limits (If Appropriate)

If geography is relevant (e.g. bricks-and-mortar operations), tie any area to where you operate or where the person worked. If your business is national and online, a geography may be unnecessary - but don’t include one just for the sake of it.

6) Pair It With Other Protections

• Confidentiality: Include a strong confidentiality obligation and use an NDA when sharing sensitive information externally.
• IP ownership: Make sure your agreements clearly state who owns intellectual property created during the engagement.
• Policy support: Reinforce obligations via sensible internal policies (for example, a Workplace Policy covering acceptable use of client data and devices).

7) Avoid “One-Size-Fits-All” Wording

Tailor the clause to the role and relationship. A senior salesperson with deep client contact may justify a longer restraint than a back-office role with limited exposure.

8) Include Practical Remedies

Reserve the right to seek injunctive relief (a court order to stop the conduct) and consider liquidated damages only where they’re a genuine pre-estimate of loss. Overreaching remedies can backfire.

Where Should You Put Non-Solicitation Obligations?

Non-solicitation clauses appear in different documents depending on the relationship. Here’s where they usually belong - and what to watch for in each.

Employees

Include non-solicitation in your Employment Contract, alongside confidentiality, IP, and post-employment restraints. For senior or client-facing roles, the business interest is clearer. Keep the scope proportionate to the role and consider cascading timeframes.

Contractors

Put non-solicitation in your Contractor Agreement, particularly if contractors work directly with your clients or team. Make sure the obligation continues after the contract ends and is limited to clients or staff they had contact with through your business.

Sale Of Business

When you buy a business, you’re buying goodwill - relationships with customers and the brand’s reputation. A robust restraint in the Business Sale Agreement (covering non-solicitation and non-compete) is standard and can reasonably last longer than in an employment setting.

Partnerships, JV, And Referral Arrangements

In collaborative arrangements, set expectations up front. Use targeted non-solicitation wording to prevent parties from bypassing each other to deal directly with customers or staff during and after the relationship.

Policies And Onboarding

Support your contracts with clear policies about data access, client record handling, and device use. If you collect personal information, ensure you have a compliant Privacy Policy and that access to client data is limited to business use.

Non-Solicitation Vs Non-Compete: What’s The Difference?

Non-solicitation stops active poaching of your clients or staff. Non-compete seeks to stop someone from working in a competing business for a period in a defined area.

Because non-solicitation is narrower and focuses on specific conduct, it’s usually easier to justify and enforce. A non-compete can still be appropriate in limited cases (for example, sale-of-business), but in employment contexts it must be very carefully tailored. If you need broader protection, get tailored restraint of trade advice before relying on a non-compete.

Common Pitfalls To Avoid

Even well-intentioned restraints can fail if they’re too broad or poorly implemented. Watch out for these issues:

• Overly broad definitions: Catch-all wording like “any customer” can be risky. Tie it to customers the person actually dealt with or learned about through your business.
• Excessive timeframes: Choose the shortest period that reasonably protects your relationships. Use cascading periods so a court can “step down” if needed.
• No link to role or interest: If the person had limited client contact, an aggressive restraint may not be reasonable.
• Confusing solicitation with competition: Non-solicitation targets active poaching, not general employment elsewhere.
• Gaps in confidentiality: Without solid confidentiality terms or an NDA, your restraint may be harder to justify.
• Relying only on contracts: Contracts help, but processes and access controls matter just as much.

Practical Steps Beyond The Contract

Strong contracts set the rules - smart operations make them work. Alongside a clear non-solicitation clause, consider these practical safeguards:

• Segment access: Limit client lists, pricing, and proposal templates to those who genuinely need them.
• Offboarding checklist: On exit, revoke system access, retrieve devices, and remind the person of their post-termination obligations in writing.
• Track relationships: Keep records of who worked on which accounts so you can confidently apply any restraint to “clients they dealt with.”
• Sanity-check processes: Make sure your CRM exports are restricted and USB/email restrictions are sensible.
• Reinforce expectations: Use onboarding and a simple Workplace Policy to set out acceptable use of client data.
• Pair with confidentiality: Non-solicitation is stronger when supported by confidentiality and, where needed, an NDA for external collaborators.

What If Someone Breaches A Non-Solicitation Clause?

Act quickly. The goal is to stop the conduct and protect your relationships.

1. Gather evidence: Save emails, messages, LinkedIn approaches, client statements, and any system logs that show solicitation.
2. Send a formal letter: Put the person on notice and demand they cease the conduct and account for any gains.
3. Contact affected clients: Reassure them and, if appropriate, remind them of any contractual terms with your business.
4. Consider urgent relief: In serious cases, seek an injunction to stop ongoing solicitation. Tailored restraint of trade advice can help you move fast.

It’s also worth reviewing and tightening your processes after any incident to reduce future risk.

How Non-Solicitation Fits Into Your Broader Legal Toolkit

Think of non-solicitation as one part of a broader risk management framework for your relationships and information. Alongside it, you’ll often use:

• Employment Contracts and role-appropriate post-termination restraints
• Contractor Agreements with targeted restraints and clear IP ownership
• NDAs for external information sharing
• Sensible confidentiality and access policies, supported by a compliant Privacy Policy
• Role-based choices about whether a narrow non-compete is appropriate

If you’re not sure which combination is right for your situation, get advice early and tailor the approach to your business model and risk profile.

Key Takeaways

• A non-solicitation clause stops ex-employees or contractors from actively poaching your clients or staff for a limited time.
• Enforceability in Australia turns on reasonableness - protect a legitimate interest with a measured scope, duration, and (if relevant) geography.
• Place non-solicitation where it belongs: your Employment Contract, Contractor Agreement, or Business Sale Agreement, supported by confidentiality and policies.
• Draft clearly: define “solicit,” limit it to relevant clients and staff, use cascading timeframes, and include practical remedies.
• Strengthen your position with operational controls - access limits, offboarding, records, and a culture of confidentiality.
• If a breach occurs, move quickly to gather evidence, send a formal letter, protect client relationships, and consider injunctions where needed.

If you’d like tailored help drafting or reviewing a non-solicitation clause for your business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.