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A Non-Solicitation Agreement and Non-Compete Agreement -- What Is the Difference?

Understandably, employers want to protect the investment they have made into their company. As an employee, you may not think of yourself as a threat to your employer; however, your employer may see you as such. If so, you may be asked to sign a non-solicitation or non-compete agreement prior to starting work for an employer or at any time after to begin working for the employer. Before you agree to sign the agreement though, you should have a firm understand of the difference between a non-solicitation agreement and a non-compete agreement.

Both a non-compete agreement, or NCA, and a non-solicitation agreement, or NSA, potentially limit your employment opportunities in the future if your current position ends for any reason. A NSA is much narrower, however, in the conduct or actions prohibited. As the name implies, a non-solicitation agreement requires you to agree, in writing, not to “solicit” the employer’s clients or customers. For example, a car dealership might have all salespeople sign a NSA agreement before hiring them to ensure that, should they leave and go to work for a competitor, they do not take with them the customer lists they have accumulated while working for the dealership and use them to lure customers away.

A non-compete agreement is typically much broader in its scope than a NSA, though it is used for the same basic reason. A NCA will often limit an employee’s ability to work in the same industry or the same geographic location for a specified period of time after severing the relationship with the current employer. For example, the terms of a NCA might prevent you from working in the same industry/field within 100 miles of your current employer for one year after you sever your relationship with your employer. Sometimes, a NCA will have a non-solicitation provision within the broader non-compete agreement.

Although both NSAs and NCAs are potentially enforceable, Pennsylvania courts tend to view them with unfavorably if they are unnecessarily restrictive in scope or distance. It is always better, however, to address an overly restrictive NCA or NSA before signing it than finding yourself in a position where you have to litigate the agreement after the fact. For this reason, it is best to consult with an experienced Conshohocken, Pennsylvania employment law attorney if a prospective, or current, employer has asked you to sign a non-compete or non-solicitation agreement. Only an experienced attorney can review the agreement and advise you whether it is in your best interest to sign the agreement or not. Contact the employment law attorneys at Curley & Rothman, LLC by calling 610-834-8819 today to schedule your free consultation.