A nonsolicitation agreement is a type of restrictive covenant that restricts former employees either from soliciting clients or employees from their former employer. Nonsolicitation provisions are often found within business contracts or may constitute separate agreements.
The enforceability of nonsolicitation agreements varies by state. For example, the United States Court of Appeals for the Fifth Circuit noted in a recent case: “Restrictive covenants are unfavored in Louisiana and are narrowly and strictly construed.” Section 23:921(A)(1) of the Louisiana Revised Statutes voids any contract provision in which “anyone is restrained from exercising a lawful profession, trade, or business of any kind," unless the provision meets a statutory provision. An example of a statutory exception can be found in Section 23:921(C): “[An] employee may agree with his employer to refrain from carrying on or engaging in a business similar to that of the employer and/or from soliciting customers of the employer within a specified parish or parishes, municipality or municipalities, or parts thereof, so long as the employer carries on a like business therein, not to exceed a period of two years from termination of employment.”
Arkansas enforces nonsolicitation agreements more generally. Section 4-75-101(a) of the Arkansas Code states that such a covenant is enforceable as long as “[t]he employer has a protectable business interest; and … [t]he covenant not to compete agreement is limited with respect to time and scope in a manner that is not greater than necessary to defend the protectable business interest of the employer.”
[Last updated in July of 2020 by the Wex Definitions Team]