Prevents parties from recruiting or hiring each other's employees or contractors during and after confidential discussions.
⚠ High Risk
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Plain English Explanation
A non-solicitation clause in an NDA prevents you from actively recruiting or hiring employees, contractors, or key personnel from the other party. This protection typically extends for the duration of the agreement plus an additional period (often 1-2 years) after it ends.
These clauses are included because during NDA-covered discussions, you'll likely meet valuable team members and learn about their skills, compensation, and dissatisfaction. The other party wants to prevent you from using that inside knowledge to poach their talent.
There's an important distinction between "solicitation" and responding to unsolicited applications. Most reasonable clauses allow hiring someone who independently applies through general job postings or reaches out on their own initiative.
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Why This Clause Matters
Talent Protection: Your employees are often your most valuable asset. Losing key personnel to a company that learned about them through confidential discussions can be devastating.
Good Faith Dealing: It ensures parties focus on the actual business purpose rather than treating discussions as a recruiting opportunity.
Competitive Balance: Prevents one party from using the NDA relationship primarily to identify and recruit talent.
Enforceability Concerns: Courts in many jurisdictions closely scrutinize these clauses; overly broad restrictions may be unenforceable.
Career Mobility: Employees have rights too - clauses that effectively prevent workers from changing jobs may face legal challenges.
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Risk Factors
Duration: Longer non-solicitation periods (beyond 2 years) may be difficult to enforce and could harm future business relationships.
Scope of "Solicitation": Does it cover only direct recruitment, or does it include responding to applicants? Broad definitions create more risk.
Covered Personnel: Does it apply to all employees or just those you actually interact with during the NDA relationship?
Industry Norms: In tight-knit industries where talent moves frequently, these clauses can create reputational issues.
Damages: The clause should specify reasonable remedies - liquidated damages provisions can be risky for either party.
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Clause Versions
Non-Solicitation of Employees
During the term of this Agreement and for a period of twelve (12) months thereafter, neither party shall, directly or indirectly, solicit for employment or engagement any employee or contractor of the other party with whom such party had material contact during the course of this Agreement, without the prior written consent of the other party.
This restriction shall not apply to:
(a) General advertising or recruitment efforts not specifically targeted at the other party's employees;
(b) Responding to unsolicited applications or inquiries from individuals who independently seek employment;
(c) Hiring any individual who was terminated by the other party prior to the commencement of recruitment discussions; or
(d) Hiring any individual after six (6) months have elapsed since such individual's separation from the other party.
Nothing in this clause shall prevent any employee from independently seeking or accepting employment with the other party.
Note: This balanced version protects both parties while allowing reasonable exceptions for general recruiting and unsolicited applications. The 12-month restriction is a commonly accepted standard.
Non-Solicitation of Personnel
During the term of this Agreement and for a period of six (6) months thereafter, each party agrees not to directly solicit for employment any employee of the other party who was personally introduced or identified by name during discussions under this Agreement.
This restriction applies only to active, targeted solicitation and does not restrict:
(a) Any form of general advertising, job postings, or recruitment campaigns;
(b) Use of recruiting agencies that were not specifically directed to target the other party's employees;
(c) Responding to any approach, application, or inquiry initiated by the employee;
(d) Hiring any individual who contacts the party through professional networking platforms;
(e) Hiring any individual who responds to opportunities posted on career websites; or
(f) Any hiring that occurs more than thirty (30) days after the individual's separation from the other party.
The parties acknowledge that employees have the right to seek and accept new employment opportunities, and nothing herein shall be interpreted to restrict employee mobility or career choices.
Why this favors you: Shorter 6-month restriction, narrow definition of solicitation limited to direct targeting, extensive carve-outs for common recruiting practices, and emphasis on employee rights to change jobs.
Non-Solicitation and Non-Hire Covenant
During the term of this Agreement and for a period of twenty-four (24) months following the expiration or termination hereof, the Receiving Party shall not, directly or indirectly, for itself or on behalf of any other person or entity:
(a) Solicit, recruit, hire, engage, or retain as an employee, consultant, contractor, or in any other capacity, any person who is or was an employee, consultant, or contractor of the Disclosing Party at any time during the term of this Agreement;
(b) Encourage, induce, or attempt to induce any employee, consultant, or contractor of the Disclosing Party to terminate or reduce their relationship with the Disclosing Party;
(c) Provide information about such individuals to any recruiting firm, employment agency, or prospective employer; or
(d) Assist any third party in any of the foregoing activities.
This restriction applies regardless of whether the individual responds to general advertising, approaches the Receiving Party unsolicited, or is referred through any third party.
In the event of breach, the Receiving Party shall pay liquidated damages equal to one hundred percent (100%) of the annual compensation paid or offered to such individual, in addition to any other remedies available at law or in equity.
Warning - This clause is highly aggressive: 24-month restriction, no exceptions for unsolicited applications, applies to all personnel (not just those you met), one-sided enforcement, and includes substantial liquidated damages. Courts may find this unenforceable in many jurisdictions.
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Negotiation Tips
1
Insist on the "General Advertising" Exception: Always ensure that responding to general job postings is permitted. Without this, you could be liable for hiring someone who saw your public job listing.
2
Limit to Direct Contacts: Push to limit the restriction to employees you actually met or interacted with during the NDA relationship, not the entire company workforce.
3
Make it Mutual: If they want protection, you should too. Reject one-sided non-solicitation clauses that only bind your company.
4
Negotiate Duration: 12 months is standard and usually enforceable. Push back on anything beyond 18 months as courts are skeptical of longer periods.
5
Beware Liquidated Damages: These preset damage amounts can be very expensive. If you must accept them, cap them at a reasonable level (e.g., 3-6 months salary).
6
Consider State Law: California heavily restricts non-solicitation clauses. If either party operates there, the clause may be largely unenforceable anyway.